Preamble

The House met at half-past Two o'clock

PRAYERS

[MADAM SPEAKER in the Chair]

Oral Answers to Questions — HOME DEPARTMENT

The Secretary of State was asked—

Asylum Seekers

Mr. David Prior: If he will make a statement on the action he is taking to reduce the number of bogus asylum seekers. [64345]

Sir Sydney Chapman: What measures he is taking to deal with the recent inflow of asylum seekers into the UK; and if he will make a statement. [64354]

The Secretary of State for the Home Department (Mr. Jack Straw): We are implementing the comprehensive integrated strategy for reform of immigration and asylum as set out in our recent White Paper. Fundamental to that strategy is a much faster system which protects genuine refugees but which deters abusive claimants. Legislation will be introduced shortly to help speed up the system and to tackle abuse.

Mr. Prior: Will the Home Secretary confirm that the number of people seeking asylum in the United Kingdom has risen by about 50 per cent. over the past two years?

Mr. Straw: The figure that the hon. Gentleman gives is correct. The principal reason for the increase is increased instability in parts of the Former Republic of Yugoslavia and of Somalia, which account for the vast majority of those who are awarded asylum status in the United Kingdom. Moreover, a comparison of our asylum figures, as a proportion of our population, with those for the rest of Europe shows that we are 11th out of 15 countries, and in absolute terms, many other European countries have many more applications for asylum and are less effective in dealing with them.

Sir Sydney Chapman: At the last Home Office Question Time, the Under-Secretary, the hon. Member for North Warwickshire (Mr. O'Brien) announced that the number of adjudicators was being increased to deal with asylum-seeking cases. That is certainly welcome. Is it not a fact, however, that the numbers of staff within the immigration service are being reduced? If so, will the Home Secretary reconsider that reduction? Surely there is

a need to increase the numbers of both staff and adjudicators to deal with the backlog of immigration and asylum cases.

Mr. Straw: As I discovered when I visited the Hatton Cross adjudication centre, under plans prepared by the previous Administration, the number of presenting officers—who are vital to processing asylum appeals—was to be decreased. I took action to ensure that the number of presenting officers was increased, and a large number of additional presenting officers are in the process of being appointed. A major programme of computerisation was set in hand by the previous Administration, which is bound to lead to some reduction in the number of clerical posts in the immigration and nationality directorate. However, under the comprehensive spending review, to make the system fairer, faster and firmer, we are increasing the overall resources devoted to immigration control.

Mr. Keith Vaz: Does the Home Secretary agree that the Government have a case backlog because we inherited a backlog of 50,000 cases from the previous Government? Does he agree also that, for 18 years, the previous Government had no strategy for dealing with immigration and asylum cases? Does he further agree that one of the most effective ways in which the Government can tackle the issue is by ensuring that decisions are taken as speedily and as efficiently as possible in line with natural justice, so that everyone involved will be informed of the decisions? Is that not the way to cut the backlog?

Mr. Straw: My hon. Friend is entirely right. The previous Administration's rhetoric was entirely belied by their practice. We are aiming, as we said in the White Paper that I published in July, to secure a situation in which initial decisions are made within two months, and appeals are disposed of within four months. Achieving that goal of course depends on our getting the new arrangements and the legislation in place.

Mr. Andrew Mackinlay: As Poland, Hungary, the Czech Republic, Slovenia and Estonia have achieved the status of, and are recognised as, democratic states with sound judicial systems, cannot applicants for refugee status who have either travelled through or claimed refugee status in relation to those countries be treated in the same way as applicants coming from Berlin, France or Brussels, in relation to whom the presumption is that, as democracy and the judicial system are safe in those places, their applications should be refused? Should not applicants who have touched base with the countries to which I referred request asylum there?

Mr. Straw: My hon. Friend is entirely right, and the immigration service has had considerable success in ensuring that people who have come from such countries seeking asylum are returned whenever it is possible. We have also made increased use of the powers of detention. However, we have not been assisted by the terms of the Dublin convention—which was signed up to by the previous Administration, in a moment of madness, in 1990—in securing the return of asylum seekers who have come through European Union countries. The convention


came into force in October 1997 and has made it increasingly difficult for us to enforce the return of asylum seekers to the European Union.

Sir Norman Fowler: On the measures to combat illegal immigration, may I remind the Home Secretary of the severe measures that he is proposing against United Kingdom freight transport operators? Is it not a fact that the illegal organisations exploiting that trade are becoming ever more professional in breaking into sealed containers transported by road? Does he agree with the Freight Transport Association that the Government should exert more pressure in ensuring security at the borders of other European countries, and pay particular attention to what is recognised to be very lax security in the port of Calais?

Mr. Straw: Here we have a perfect example of the Conservatives' rhetoric on asylum seekers being belied by their practice and their subscription to clients such as the Freight Transport Association. Of course we accept the need for greater security at Calais. We are taking positive action on that with Jean-Pierre Chevenement, the French Minister of the Interior. Before we listen to the Conservatives' apologies for the Freight Transport Association, let us be clear that in many cases hauliers knowingly or negligently allow their lorries to be used for the transportation of illegal immigrants. We shall crack down on that, just as the previous Administration cracked down on civil aviation carriers.

Immigration Advisers

Maria Eagle: What plans he has to regulate immigration advisers. [64346]

The Parliamentary Under-Secretary of State for the Home Department (Mr. Mike O'Brien): The Government have a manifesto commitment to control unscrupulous immigration advisers. We intend to implement it and will include provisions in a new asylum and immigration Bill in a few weeks' time.

Maria Eagle: I thank my hon. Friend for that reply. Some welcome action is imminent, which can only be good. As one hears ever more lurid stories of so-called immigration advisers indulging in what can only be described as sometimes criminal behaviour, does he agree that it is vital that those who are entitled to immigration advice should be able to rely on its accuracy and on the integrity of those providing it? Will he ensure that those who seek advice about their immigration status can rely on its quality; that, wherever malpractice is found—in solicitors offices or other organisations that purport to be able to give legal advice—it will be dealt with; and that there will be a crackdown on advisers who do little more than make money out of the vulnerable?

Mr. O'Brien: The activities of unscrupulous advisers are a major scandal that must be dealt with firmly and comprehensively. We shall introduce the necessary measures in legislation during this Session. We have already created a dedicated unit in the immigration and nationality directorate to investigate advisers who may be

abusing our current immigration laws. The previous Administration did nothing, but we shall take the necessary action.

Mr. Desmond Swayne: How can the hon. Gentleman possibly take on the regulation of the so-called advisers when his right hon. Friend the Home Secretary admitted only moments ago that the number of employees in the immigration service was being reduced?

Mr. O'Brien: The hon. Gentleman seems not to have heard my right hon. Friend clearly. There has been a movement towards computerisation of the IND, which may affect some clerical staff. However, the extra money that we shall be able to direct towards immigration control and the effective control of the asylum system as a result of the comprehensive spending review will enable us to target resources on having the employees that we need where we need them so that we can deliver effective immigration controls and an asylum system that works, which the previous Administration failed to deliver.

Personality Disorders

Mr. David Hinchliffe: What proposals he has to consult with ministerial colleagues in the Department of Health on introducing legislation relating to individuals with personality disorders. [64347]

The Secretary of State for the Home Department (Mr. Jack Straw): Extensive consultation preceded the publication on 8 December by my right hon. Friend the Secretary of State for Health of the Government strategy,"Modernising Mental Health Services". That document explains that the Government are considering proposals to create
a new form of reviewable detention for those people with a severe personality disorder who are considered to pose a grave risk to the public.

Mr.Hinchliffe: Will my right hon. Friend assure me that the Government recognise that under existing law it is not possible to detain for treatment patients who are deemed untreatable under the Mental Health (amendment) Act 1983? Will he assure me that the Government will not put pressure on the medical profession to detain for treatment people whom it deems untreatable? Will he set out the Government's thinking on resolving a gap in the law that has existed since the passage of the Mental Health Act 1959, more than 40 years ago, and say how the Government will act on this difficult matter?

Mr. Straw: Whether a patient comes within the terms of the Mental Health (amendment) Act 1983 is a matter for the medical practitioners concerned, not for Ministers.
We are entering into a dialogue with the psychiatric profession because, as I have indicated in earlier parliamentary replies, the practice has varied over time and between different forensic psychiatrists. I had a meeting about exactly that matter last week with the president of the Royal College of Psychiatrists, and we will continue that dialogue. It is my view, and that of my right hon. Friend the Secretary of State for Health, that the concept of untreatability is fundamentally antithetical


to the whole philosophy of western science, as it tries to set in stone whether or not a particular patient is capable of treatment.
As to the future, my right hon. Friend the Secretary of State for Health has made it clear that alongside prison for those who are subject to a serious personality disorder and who commit offences, and hospital for those who are categorisable at the moment under the Mental Health Acts, we need a third approach, under which those who are suffering from severe personality disorders and who pose a grave risk to the public can be kept in securer conditions as long as they continue to pose that risk. There they may have treatment, if such treatment can be identified.

Mrs. Virginia Bottomley: Following the question from the hon. Member for Wakefield (Mr. Hinchliffe), I am pleased to hear that the Home Secretary is now having dialogue with the leader of the psychiatrists after his somewhat sharp remarks about them in this place not so long ago. The National Association for the Care and Resettlement of Offenders report recommended a separate establishment, outside the health and prison institutions, for those with severe mental illness, and that was very much the recommendation of the Fallon report last week. That is an extremely costly proposal. In the meantime, the danger is that those complex, difficult and dangerous individuals will be shunted between health and prison institutions without practical action. What timetable can the Home Secretary offer us?

Mr. Straw: I agree with the right hon. Lady that this a complex matter. Although they are relatively few in number, those individuals pose great problems for the professions concerned—but, above all, they pose a serious risk to the public if they are left at large. We are working as quickly as we can on the development of the third service. To keep costs down, we are looking at ways in which the Prison Service and the secure hospitals can be used for part of the provision. I am sorry that I cannot give a precise date for implementation, but we are proceeding determinedly against a background where the original proposal for such provision was made in 1975, in the Butler report.

Mr. A. J. Beith: Is the Home Secretary aware that a few very dangerous people—who used to be known as psychopaths—will be released from prison eventually, unless a psychiatrist certifies that their condition could be alleviated, or prevented from deteriorating, by treatment? It is no use castigating psychiatrists, and asserting—as the Secretary of State for Health did last week—that they are refusing to certify simply so that they can avoid having to treat those people, when to make such a certification would be in defiance of the Mental Health Act 1959. Does the right hon. Gentleman recognise that, however fruitful his discussions are, there is a gap in the law that will have to be dealt with?

Mr. Straw: We are dealing with the matter, but I happen to believe that the remarks of my right hon. Friend the Secretary of State for Health were entirely justified. Moreover, a recent decision by the House of Lords Judicial Committee in the case of Reid made it clear that

the current definition of treatability does not just include whether a potential patient is treatable by the medical profession, but can include whether, for example, they are susceptible to sex offender treatment programmes run by the Prison Service or to treatment by psychological and therapeutic services. I say again that we already know that the practice of medical practitioners in this field varies considerably. That justifies hon. Members on both sides of the House who are faced with a seriously disturbed offender—who, without almost any doubt, is likely to commit further offences—saying to the relevant medical practitioners, "Are you absolutely certain, within the law as it has been defined extensively by the courts, that this individual is not susceptible to any treatment of any kind?" That must be the question before such people are let out at large.

Mr. John Greenway: The Home Secretary is right, but is there not a very wide range of individuals with personality disorders? Some disorders are much milder and are treatable. If we are serious about reducing the prison population, we must take on board the fact that some people with a personality disorder that could and should have been treated need never have ended up in prison. If there is a scandal in this, it is the fact that so many young people who go out of the control of the Department of Health because of age are left with no one to care for them. It is scandalous that some psychiatrists say that they are not treatable, when the majority view is that they are.
The Home Secretary knows of my great interest in this issue. Will he press his colleagues in the Department of Health to introduce mental health reform legislation at the earliest opportunity? The Minister of State may shake his head, but there is some talk about the next Queen's Speech and the matter is urgent. I hope that mental health reform measures would command the full consensus of the House.

Mr. Straw: I am grateful to the hon. Gentleman, and I know of his great interest in this subject. I am sure that most Members of Parliament would subscribe to his views about mentally disordered prisoners who do not pose a serious risk to the public and could more appropriately be treated in the mental health system.
My right hon. Friend the Secretary of State for Health has made clear to the House the importance that he attaches to introducing legislation. For reasons that the hon. Gentleman will fully understand, I cannot make any promises about when that will be. My right hon. Friend has already published the fact that he is investing an extra £700 million in mental health services over the next three years, not least to tackle the problem that the hon. Gentleman identified.

Car Crime

Mr. Andrew Reed: When he last met representatives from the car industry to discuss measures to reduce car crime. [64348]

The Minister of State, Home Office (Mr. Paul Boateng): I met the vehicle crime reduction action team, on which the Society of Motor Manufacturers and Traders and the Retail Motor Industry Federation are represented, on 17 November 1998. I discussed the initiatives that they


are driving forward to achieve a 30 per cent. reduction in vehicle crime over the next five years—a target announced by my right hon. Friend the Prime Minister on 29 September 1998.

Mr. Reed: As someone who has been the victim of car crime five times in the past four years, I can sympathise with the hundreds of thousands who have suffered. Does my hon. Friend agree that there is a general perception that the motor industry has not taken the issue seriously enough? What specific measures has he asked the industry to take to assist in that 30 per cent. reduction in crime, which we would all welcome?

Mr. Boateng: Vehicle crime of the kind of which my hon. Friend has, sadly, been the victim, accounts for losses of about £3 billion a year and is a really serious problem. I am glad to say that we are now working in close partnership with the motor industry, not least in relation to design and structural issues about the glazing of the side and rear of motor vehicles, where modifications can make it that much more difficult for the criminal to get in, and in relation to the retail trade and the problem of secondhand cars, because secondhand cars are more likely to be the target of vehicle crime than those that are bought new, which may account for my hon. Friend's difficulty. There are lessons for all of us, and we are working in partnership with the motor industry to ensure that we learn them.

Mr. Edward Gamier: Many people who commit car crimes do so to fund their drug habit. Will the Minister bear in mind the activities of Rotary throughout this country in seeking to educate young people away from drug abuse and crime, and ensure that his colleagues in the Home Office join Rotary in promoting that excellent initiative?

Mr. Boateng: I warmly welcome the hon. and learned Gentleman's reference to the contribution that the voluntary sector can make in partnerships that are designed to reduce the impact of drugs in our society. The Government, in partnership with the voluntary sector and with health authorities throughout the country, are spending an additional £217 million on the problem. It is of great assistance to have that Government intervention supplemented by the activities of organisations such as Rotary. Such partnerships are the best way to combat crime and its causes, and Rotary and other organisations are to be congratulated on their contribution.

Mr. Eddie O'Hara: Is my hon. Friend aware that, on Merseyside, car crime and other forms of serious crime are at their lowest levels for 18 years? Will he therefore join me in condemning the BBC 2 documentary programme "Mersey Blues", which last Wednesday described crime as a career choice on Merseyside? Does he not agree that such cheap remarks are an insult to the people of Merseyside, that they do an injustice to the Merseyside police and that they undermine those of us who are trying to regenerate the area by attracting inward investment?

Mr. Boateng: The fearfulness and alarm that can be generated by programmes such as the one that my hon. Friend has described give rise to concern, not least

on Merseyside. Recently, I met the chief constable and the chair of the police authority there, and I know that they believe that the programme does not represent the reality of policing on Merseyside. I am glad to endorse the product of the Crime and Disorder Act 1998: it has led to some very effective partnerships in the area which are reducing crime. All those engaged in those partnerships prove once more how valuable they are in preventing and reducing crime.

Police (Early Retirement)

Mr. Gareth R. Thomas: Which police authority has the (a) highest and (b) lowest rate of early retirement through sickness. [64349]

The Parliamentary Under-Secretary of State for the Home Department (Kate Hoey): In 1997–98, Derbyshire constabulary had the highest rate of ill-health retirement among police forces in England and Wales, at 65 per cent. of all retirements. Surrey police had the lowest such rate, at 14 per cent. of all retirements.

Mr. Thomas: I am grateful to my hon. Friend for that reply. May I commend to her the work of the police force in Harrow, and especially of those officers working out of Pinner police station in my constituency, with whom I was able to go out on the beat on Friday?
Does my hon. Friend agree that continued efforts to increase efficiency by police authorities are essential if we are to get the best use out of the police service's resources in the battle against crime? Does she accept that further measures are needed to reduce the number of costly early retirements as a result of sickness?

Kate Hoey: I am glad that my hon. Friend went out with his local police. It is important for Members of Parliament to do that and thereby learn what is going on in their areas. Clearly, more efficiency is needed, especially with regard to sickness in the police force, although there has been some improvement: for example, the early retirement rate as a result of sickness has fallen on Merseyside from 77 per cent. to 54 per cent, and in Cleveland, from 58 per cent. to 32 per cent. However, police authorities, chief constables and the public know that that is still not good enough. More has to be done to ensure that fewer police officers retire early.

Miss Anne McIntosh: Will the Minister join me in welcoming the attempts by the North Yorkshire police to boost morale in an area where the early retirement rates are unacceptably high? Given that background, will the Minister join me in putting pressure on the Minister for Local Government and Housing to give a more generous standard spending assessment to North Yorkshire police? Under this year's settlement, the force will not be able both to meet last year's pay awards and to install the more expensive radio system that is vital in such a sparsely populated rural area. The North Yorkshire force also intends to raise manning levels to cope with the millennium celebrations: will the Minister come to our aid?

Kate Hoey: I should have mentioned the North Yorkshire force in my previous answer, as its retirement rate from sickness shows one of the best improvements in the country, having fallen from 76 per cent. to 49 per cent.
On the question of the settlement, it is a fair settlement at a time of general constraint on public spending. All police forces will have to consider the efficiency and value for money exercises in which some forces are already doing extremely well. The police have been asked to make efficiency savings of 2 per cent. in the coming year, and the savings can then be invested in front-line policing. If North Yorkshire police get their sickness level down even further, more police will be out there, on the beat, at the front line, dealing with the public.

Mr. Martin Salter: How confident is my hon. Friend that early retirement is not used as an excuse by incompetent or corrupt police officers to avoid the proper disciplinary process? What plans has she to address that issue in the wake of the bungled murder inquiry into the Stephen Lawrence case?

Kate Hoey: My hon. Friend would not expect me to make any comment on the particular case to which he refers, which involved an ordinary, not a medical, retirement. However, the issue is one that causes great concern both to the public and to the police and we look forward to the report of the Lawrence inquiry, from which might come suggestions that we shall be able to take up. It is clear that the public will not accept police officers who face disciplinary proceedings being able to avoid normal procedures, and we shall ensure that anything that can be done is done. Changes already made to the disciplinary code and police regulations will take effect on 1 April.

Mr. Tim Loughton: How does the Minister account for the fact that my local police force in Sussex has suffered the second-largest fall in the number of on-duty police officers of any force in the country since May 1997 at a time when police resources are greatly stretched by the legislation emanating from her Department? Will she try to put that down to early retirements, or is it, in fact, another example of the Labour Government's actions in office failing to match up to their pre-election rhetoric about being tough on crime??

Kate Hoey: I remind the hon. Gentleman that the police settlement for the past two years was made by the previous Government; it has nothing to do with the Labour Government. The settlement is fair and those police forces that are careful about how they spend their money will be able to ensure that the public are policed properly.

International Crime

Mr. Jim Cunningham: What recent discussions he has held with his European counterparts on reducing serious international crime. [64350]

The Parliamentary Under-Secretary of State for the Home Department (Kate Hoey): My right hon. Friend the Home Secretary and I discussed co-operation in reducing international crime with our European Union counterparts at the meeting of the Justice and Home Affairs Council on 3 December. International crime issues have also formed part of the agenda for meetings that my

right hon. Friend and I have had in the past three months with the German Ministers of the Interior and of Justice, the Austrian Minister of the Interior and the French Minister of Justice, and for the meetings that I had with the Hungarian Ministers of the Interior and of Justice during my visit to Budapest in December.

Mr. Cunningham: What discussions has my hon. Friend held with the French Minister of the Interior about the high level of smuggling of cigarettes, beer, spirits and drugs? Such smuggling can cause harm in my constituency in Coventry, with many off-licences and newsagents being badly affected.

Kate Hoey: As my hon. Friend may know, although the French Minister of the Interior is now back at work, he has been ill for the past few months, during which time on-going discussions were held with his officials. My hon. Friend is right to point out the problems of alcohol and tobacco smuggling: that is a serious criminal activity, which robs decent, honest taxpayers. We are doing more to tackle the problem and Her Majesty's Customs and Excise is implementing tougher policies and better targeting. Those efforts are beginning to work and we shall continue to work closely with the French Government.

Mr. John Wilkinson: Does the Minister agree that the organisation of illegal immigration is one of the most serious aspects of international crime within Europe? In that context, will she or her right hon. Friend the Home Secretary hold discussions with European Justice Ministers to ensure that each EU member country deals properly with bogus asylum seekers and illegal immigrants, and that they are dealt with in the first country they reach? If Her Majesty's Government cannot reach an accord on that matter, will the Home Secretary tear up the Dublin convention, which he so rightly criticised?

Kate Hoey: It is a pity that the hon. Gentleman did not make those views clear before the previous Government signed the Dublin convention. However, I agree that the problem of gangs organising illegal immigration is very serious. The matter is discussed continually by our European partners and by the accession countries because it is not simply a European Union issue: it affects all of Europe. The Under-Secretary of State for the Home Department, my hon. Friend the Member for North Warwickshire (Mr. O'Brien), has just returned from a visit to Poland, the Czech Republic and Slovakia during which precisely those sorts of issues were discussed. It is a serious problem,which we must tackle at source.

Mr. Gerald Bermingham: I declare an interest as a practising lawyer. Does the Minister accept that one of the best ways of curbing the smuggling of loose tobacco which is used in hand-rolled cigarettes would be to persuade the Belgian authorities—the Antwerp warehouses supply 70 per cent. of the rolled


tobacco available in the United Kingdom—to allow the extradition of Belgian citizens to stand trial on conspiracy charges before the British courts?

Kate Hoey: In his usual way, my hon. Friend has made an important point that we shall examine and pursue. We shall clearly do anything that we can to prevent the smuggling of alcohol and tobacco.

Mr. Ken Maginnis: In relation to international co-operation, the Minister will be more than familiar with the recent success of the Garda Siochana in intercepting a huge consignment of drugs headed for Northern Ireland, with which were included 16 machine pistols and silencers. Does she recognise that, if there is a diminution in the level of terrorism in Northern Ireland and in Great Britain, the infrastructural and logistical capability will be filled by international terrorists who are involved in the drugs trade? Will the Home Department pay particular attention to encouraging police constabularies in Great Britain to co-operate even more than at present on a day-to-day basis with the Royal Ulster Constabulary and the Garda Siochana on that issue?

Kate Hoey: I thank the hon. Gentleman for that timely question. It is important to recall the amount of drugs seized and to congratulate the Garda and the RUC on their continued co-operation, which is very good at present. We must obviously extend and improve co-operation within the rest of the United Kingdom, and that is already happening. Terrorism affects everyone and may be a by-product of other organised crime.

Owen Oyston

Mr. Dale Campbell-Savours: If he will discuss with the chief constable of Manchester the availability of information on the investigation of accusations of rape in the case of Owen Oyston. [64351]

The Secretary of State for the Home Department (Mr. Jack Straw): I am afraid that I cannot accede to my hon. Friend's request. The disclosure of information about an investigation is a matter for the chief officer of the police force concerned. Ministers have no authority to intervene in such matters, nor would it be appropriate for us to do so.

Mr. Campbell-Savours: My right hon. Friend will be aware that many people in the north-west of England believe that Owen Oyston is innocent of the crime of rape and that his trials were a travesty of justice. He will know also that Mr. Oyston has refused to concede any element of guilt in this case, even though he might secure early parole. Will my right hon. Friend assure me that all the documents in the possession of Manchester police—including the many documents that were not given to the defence, and particularly all of those relating to Cullis—will be handed to the Criminal Cases Review Commission immediately? Is it not quite wrong that this man—who many people, including me, believe is innocent of this crime—should languish in prison simply because the CCRC does not have the necessary resources to conduct an earlier inquiry?

Mr. Straw: It is not for me or any Minister to give the undertakings that my hon. Friend requests.

Mr. Owen Oyston was convicted by a jury on serious charges and made an appeal to the Court of Appeal criminal division, which was dismissed. I now understand that he has made an application to the CCRC. What transpires is entirely a matter for that commission, not for Ministers.

Young Offenders

Mrs. Sylvia Heal: When he expects to achieve his target of halving the time between an offence being committed and the young offender appearing in court. [64352]

The Minister of State, Home Office (Mr. Paul Boateng): In 1996, the average time from arrest to sentence for persistent young offenders was 142 days. We are committed to halving that time in this Parliament. On coming to office, we took early action to begin the process of change. There are now more than 150 fast-track schemes in operation covering almost half of all courts in England and Wales. Provisions in the Crime and Disorder Act 1998 were brought into force on 30 September last year to enable the courts to manage cases more quickly and efficiently. Other measures are currently being piloted with national implementation planned for October this year. The Government have set demanding performance targets for all stages of proceedings up to and after trial and for all youth justice agencies.

Mrs. Heal: I thank my hon. Friend for his reply. Does he agree that justice delayed is justice denied and that victims, in particular, will welcome the Government's efforts to eliminate any delay in the criminal justice system? Halesowen and Warley magistrates courts, which cover my constituency, operate fast-track schemes and early administrative hearings, so that the first hearing takes place within four days. The clerk at Warley magistrates court has told me, however, that sometimes there are delays if subsequent hearings are required because other agencies involved have difficulty in meeting the court's timetable. Is my hon. Friend having discussions with all agencies connected with youth justice?

Mr. Boateng: I have visited Warley magistrates court and I know how seriously its staff take their duties, not least to the victims of crime, who particularly suffer as a result of delay. The sort of delays that have occurred in the past, particularly in the implementation of youth justice, have a very damaging effect on our capacity to make young people understand what the consequences of their offending will be for themselves and the victims of crime. We are therefore right to set those demanding and challenging targets.
Bearing in mind Warley's experience, it is worth while contrasting the 150 fast-track schemes that are now operating with the eight that existed when we took office. That is the difference between new Labour in action and Conservative rhetoric, and it is worth pointing it out.
There is a responsibility to make sure that all agencies work as partners in this endeavour, which is why we are working closely with the Department of Health and all other relevant Departments to ensure that education and social services reports are presented in good time and cases can be dispatched fairly, efficiently and, above all, rapidly.

Electoral Reform

Mr. John Bercow: What plans he has to implement the recommendations of the independent commission on the voting system. [64355]

The Secretary of State for the Home Department (Mr. Jack Straw): We made it clear in our manifesto that implementation of the recommendations of the independent commission on the voting system would require the endorsement of those recommendations by the people of this country in a referendum, and that remains the position.

Mr. Bercow: I thank the Home Secretary for that reply. Why should we give up the British electoral system, which is the most widely used in the world—it is used in 62 countries and by 49 per cent. of the world's electors—in favour of the dog's breakfast served up by the noble Lord Jenkins, which has never been tried anywhere in the world? Does the right hon. Gentleman agree that when, as long ago as 1974, the then Labour Cabinet rejected Lord Jenkins's first paper recommending electoral reform, it demonstrated a wisdom that he would be well advised to follow 25 years later?

Mr. Straw: Some people take the hon. Gentleman's view; others take a different one. There is one thing of which I am clear: any change to the electoral system should have the full support of the British population in a referendum. It is of course a matter for the British people whether they wish to stick with the current system.

Mrs. Gwyneth Dunwoody: Before my right hon. Friend allows his colleagues to blunder into the incompetent system suggested by Lord Jenkins, who proved conclusively that he could not even run a political party, will he show sufficient confidence in the British electorate's ability to study carefully the selection procedures for and elections to the Welsh Assembly and the Scottish Parliament and, only after those arrangements have had sufficient time to run, put to the British people the suggestion that even this Government can occasionally make mistakes?

Mr. Straw: I entirely subscribe to my hon. Friend's final proposition—as was said to Jack Lemmon in the last line of "Some Like it Hot", "Nobody's perfect." That certainly includes the present Home Secretary. There is a case for seeing how the new systems of proportional representation for elections to the Welsh Assembly, the Scottish Parliament, the Northern Ireland Assembly and, indeed, the European Parliament, fall into place before proceeding with the referendum. We shall take those findings into account.

Mr. Richard Allan: Will the Home Secretary confirm that his view of electoral systems could be described as horses for courses, as he has said previously? Will he confirm, to echo the debate on the euro, that, while the Conservatives say that they want no change and my party is committed to change, the Government's position is to consider the national interest in deciding whether to change? Will he therefore also

confirm that it remains his Government's opinion that it is in the national interest that a referendum of the British people should decide the matter?

Mr. Straw: I am grateful to the hon. Gentleman. It goes without saying that we speak and decide things only in the national interest. We have always been committed to a referendum. Which recommendations Ministers and Members of Parliament make to the electorate remain to be seen. Let us be absolutely clear: the decision on future voting systems for Westminster is not in the hands or the pockets of any Minister or Member of Parliament. It is for the British people to decide. I am quite sure that, when it comes to it, there will be a vigorous and open debate on the issue.

Mr. Peter L. Pike: Will my right hon. Friend confirm that the Jenkins proposals would allot a disproportionate share of the say to minority parties and that that is not an acceptable way forward? Is not it a fact that, if we accept the Jenkins fudge, between 15 and 20 per cent. the incumbents of parliamentary seats would not be directly elected?

Mr. Straw: It is patent that that could be a consequence. During the debate on the Jenkins report, I pointed out some of the questions that still remain about its recommendations. The Jenkins commission felt that the current system produced a lack of proportionality. If one examines its subsequent proposals, however, one might consider that the fact that the Conservative party's position—this is not a partisan point—will remain the same suggests that the committee's recommendations are not robust on proportionality, if on anything else.

Sir Norman Fowler: Contrary to what the hon. Member for Sheffield, Hallam (Mr. Allan) has said, does the Home Secretary remember that, when he was in opposition, he wrote an article for The Times, in which he said:
Proportional representation is not a matter of morality but crude party advantage—which is why the Liberals only adopted the idea in 1922, when their decline really began"?
Before congratulating the Home Secretary on those words, may I check that he stands by them?

Mr. Straw: Of course I remember the article. It is one of a series that I used to write for The Times, and which I much enjoyed writing. It might be to the advantage of the House if I were to publish my extensive collected works on first past the post. I believe that the position that I have taken on the subject is no secret.

Vulnerable Youths (Criminal Activity)

Mr. Chris Mullin: What plans he has to expand provision for diverting vulnerable youths away from criminal activity; and if he will make a statement. [64356]

The Minister of State, Home Office (Mr. Paul Boateng): We are pursuing a wide-ranging programme to reform and speed up the youth justice system and to divert vulnerable young people away from crime. We are currently piloting a range of new measures stemming from the Crime and Disorder Act 1998, including the final


warning scheme, the child safety order and the parenting order, all of which are designed to help ensure early action when children and young people first offend or are at risk of offending.

Mr. Mullin: I am not talking of the measures under the Crime and Disorder Act 1998; I am talking about some of the very good schemes—such as one running in the Home Secretary's constituency—designed to provide young people who live in areas vulnerable to crime with constructive activities to prevent their involvement in crime in the first place. I want to be sure that that issue is now being taken seriously in the Home Office; that did not happen under the previous Government. Such an approach requires co-ordination with other Departments that have a part to play—such as the Department for Education and Employment and the Department of the Environment, Transport and the Regions.

Mr. Boateng: I am happy to give my hon. Friend that assurance. The results of the scheme to which he refers, youth works, have been laudable, and that scheme is an example of the good practice that we want to be spread across the country. As my hon. Friend must be aware, we have established the Youth Justice Board, which has responsibility for developing similar initiatives. We have underpinned its work with more than £80 million so that progress may be made on that agenda. That is good news for young people and for society. We are determined to deliver on the agenda that includes effective diversion from crime.

Mr. Bob Russell: I congratulate the Chairman of the Select Committee on Home Affairs, the hon. Member for Sunderland, South (Mr. Mullin), on his question.
What is happening about being tough on the causes of crime? What evidence is there that the Home Department is in discussion with other Departments to ensure that we have effective measures to prevent crime being committed in the first place?

Mr. Boateng: I know that the hon. Gentleman takes an interest in this matter and he knows that we are working on the issue not only with the Department for Education and Employment and the Department of the Environment, Transport and the Regions—with which we are making progress on a range of projects as a result of research and funding—but, importantly, with the Department of Health. As a result of the partnerships that are being established pursuant to the Crime and Disorder Act 1998 and the youth offender teams, for the first time the Department of Health has an input at local level, through local health authorities and trusts. Evidence has shown that early intervention works, and we believe that our new investment in such schemes will deliver rich dividends.

Police (Sickness)

Mr. Tony McNulty: Which police authority had (a) the highest and (b) the lowest level of absence through sickness in the last year for which figures are available. [64358]

The Parliamentary Under-Secretary of State for the Home Department (Kate Hoey): The latest figures available are for 1997–98. The highest level was in South Wales, where the average figure per officer was 17.39 days per annum, and the lowest was in Wiltshire, at 8.76 days.

Mr. McNulty: I thank my hon. Friend for that answer. Although I accept that the overwhelming number of sickness absences in our police forces are genuine, can she assure me that, where there is evidence of abuse, it will be dealt with firmly—not ignored or swept under the carpet—and that the perpetrators will not be retired without facing disciplinary action?

Kate Hoey: My hon. Friend is right. We are taking the matter seriously. He will be aware that Her Majesty's inspectorate of constabulary recently published its report, "Lost Time", which highlighted sickness levels in the police last year. We obviously cannot allow such levels to continue without tackling them effectively. Sickness absence costs between £210 million and £250 million a year; we must all work to reduce that.

Sir Norman Fowler: Obviously, greater efficiency is important, but will the Minister confirm that last year, there were more than 13,000 assaults against individual policemen and policewomen, and that Her Majesty's chief inspector of constabulary reported that the amount of time lost through sickness because of assault was "remarkably low"? Would it not be a grave mistake, therefore, if we failed to recognise the exceptional devotion to duty of the vast majority of members of the police service in this country?

Kate Hoey: The right hon. Gentleman's remarks show that there is no relationship between inputs and outputs. Clearly, some members of the police force will have to leave because of the assaults that they have suffered, or the stress of the job and all the difficulties that being a police officer entails, but there is no reason why sickness levels in certain parts of the country cannot be brought down. I hope that we would have support from across the Chamber for all the measures that can be taken to do that. It should not be seen as a party political issue.

Mr. Barry Sheerman: Does my hon. Friend agree, however, that there are many stressful occupations? Teachers and many others have a stressful life. The police force is in a privileged position: its members have a shorter career term than most other professions—on average, 30 years. Although we have great respect for our police force, it is a matter of concern if there are high rates of sickness and of early retirement through sickness, especially if that retirement is used to evade scrutiny and the proper procedures of police security.

Kate Hoey: I agree with everything that my hon. Friend said, particularly about the levels of stress associated with other jobs. Answering questions in the House is sometimes rather stressful. My hon. Friend's comments underline the need for us all to work together to reduce sickness levels. Police officers should not be allowed to make sickness an excuse for avoiding disciplinary measures, and we will make sure that that does not happen.

Young Offenders

Dr. Julian Lewis: When he expects to end the practice of holding 15 and 16-year-olds in adult prisons. [64359]

The Parliamentary Under-Secretary of State for the Home Department (Mr. George Howarth): I hope that we can all agree that juveniles in custody on remand or under sentence should be held in facilities appropriate to their needs. The Government intend to start work during 1999 to establish a distinct estate within the Prison Service for 15-to-17-year-old boys remanded or sentenced to custody, and to improve the care and regimes delivered within it. An assessment is already under way of the needs of young women under the age of 18.

Dr. Lewis: Does the Minister recall that when his party was in opposition, its shadow Home Affairs team, led by our present Prime Minister, repeatedly castigated as inadequate the Conservative programme for providing no fewer than 170 secure local authority places, and that the present Prime Minister said that the problem could be solved "without delay"? Does the Minister realise that the admission from his Department, in response to repeated questioning from my hon. Friend the Member for Hertsmere (Mr. Clappison), that the present Government have provided only six extra places since they came into office shows that the Labour party says one thing in opposition and produces a heck of a lot less in government?

Mr. Howarth: No. The hon. Gentleman should take a little more time to reflect on what the Government whom he supported achieved over 18 years. In just 20 short months we have started to deal with a problem that has

been festering for many years. The hon. Gentleman should judge us on what we achieve over the term of this Government. At the end of that period, proper arrangements will be in place to deal with juvenile offenders in a way that would not have entered the imagination of our predecessors, the Government whom the hon. Gentleman supported. He should be ashamed of their record. We are putting right the wrongs that they perpetrated.

Mr. James Clappison: Is not the Minister overlooking the words of the Prime Minister when he was shadow Home Affairs spokesman, when he said that the places in local authority secure accommodation could be provided "without delay", and when he said that
This country does not want to wait years before the problem is dealt with"?—[Official Report, 11 January 1994; Vol. 235, c. 40.]
The Labour Government have provided only six places. Are not the Government welshing on what they said in opposition, when they undertook to deal with the matter by providing more places in local authority secure accommodation? Now they say that the 15 and 16-year-olds should be held in part of the prison estate. Are they not reneging on commitments given by the Prime Minister in opposition?

Mr. Howarth: I find that outrageous. The hon. Gentleman was a Minister in the previous Government and they did nothing about the growing problem of how to deal with juveniles. Conservative Members criticise our spending plans, and when we decide to do something about problems by spending money on them they criticise us for doing so. They should hang their heads in shame for the mess that they made of dealing with juvenile crime and the juvenile criminal justice system. For the hon. Gentleman to lecture the Government from the Dispatch Box is laughable.

Kosovo

The Secretary of State for Foreign and Commonwealth Affairs (Mr. Robin Cook): With permission, Madam Speaker, I should like to make a statement on recent tragic events in Kosovo.
On Saturday we received reports of a massacre at Racak, south of Pristina. General Drewienkiewicz, the leader of the British team in the Kosovo verification mission, visited the site on Saturday, and I spoke to him that afternoon. General Drewienkiewicz reported that the bodies he saw had mostly been shot in the head or neck in what looked like an execution. Those who had been killed appeared to be of all ages, including grey-haired old men. None of the bodies he saw were wearing uniform. He saw no evidence of fighting, such as spent shell cases.
It is simply not credible that those who were killed were the casualties of a military conflict. The eye-witness accounts of international observers make it only too clear that they were murdered. In any common-sense understanding of the term, this was a war crime. The past decade of ethnic conflict in the former Yugoslavia is all too full of such atrocities. Nevertheless, however hardened we are by familiarity to such scenes, every hon. Member must have been shocked and repelled by the cold and calculated character of this massacre. Several thousand civilians have since been reported to have fled the area. We once again face a potential humanitarian crisis as the result of Serb repression within Kosovo.
Yesterday I spoke with the German, French and Italian Foreign Ministers. I obtained their agreement that our four ambassadors in Belgrade should formally lodge a joint demarche demanding that the officers of the army and police units in Racak last Friday must immediately be removed from duty while these murders are investigated. We also insisted that the International War Crimes Tribunal must be allowed to carry out an investigation in Kosovo.
Last Wednesday I visited the tribunal in The Hague and met Judge Arbour, the chief prosecutor. Both she and Judge MacDonald, the president of the tribunal, expressed warm appreciation of the strong support that the Government have provided to the tribunal in terms of funds, personnel and political commitment. At the time, I repeated our support for the demand of the tribunal for access to Kosovo. Earlier this afternoon, Judge Arbour attempted to cross the border into Kosovo, but was turned back by Serb border forces. Later today, the Security Council will meet in emergency session to consider the events in Kosovo. The British representative will demand that the Security Council makes clear its support for the tribunal—which was set up on the authority of the United Nations—and insists that the tribunal must be allowed access to Kosovo.
If we are to establish peace and stability in Kosovo, it is vital that we escape from the relentless cycle of ethnic atrocity followed by reprisal. Those individuals who are responsible for such murders must personally be brought to justice. That would be the most fitting response to this atrocity, but it would also send a strong message to all officers serving in Kosovo that they will be held to account for any offence that they commit against humanitarian law.
I salute the courage and the commitment of the members of the Kosovo verification mission. They operate in circumstances of real risk, as was demonstrated when a British member of the team was shot at and injured last week. I am pleased to tell the House that he is making a good recovery.
The Kosovo verification mission has made a real contribution to stability in Kosovo, in particular by brokering local ceasefires and negotiating refugee returns. The public attacks on it in Belgrade this weekend seem to forget that only last week the verification mission was instrumental in securing the release of eight Serb hostages. However, the verification mission can succeed only on the basis of the co-operation to which President Milosevic committed Belgrade in the Holbrooke package. We therefore deplore the fact that yesterday Serb security forces entered Racak against representations by the verification mission, and opened fire on the village despite the presence in it of verifiers. We have already protested in Belgrade about that event, and tomorrow Generals Clark and Naumann will be demanding full co-operation with the verification mission.
Those who led the massacre in Racak must bear full responsibility for their actions. Nevertheless, all those who have contributed to the political stalemate in Kosovo must bear their share of responsibility for creating the climate in which the ceasefire has crumbled. The Holbrooke package at the end of last year provided Kosovo with the prospect of real autonomy, including control of its local police force and free and fair elections supervised by the Organisation for Security and Co-operation in Europe. It offered Serbia the opportunity to withdraw from an armed conflict that undermines its economy and isolates it in the world.
A detailed paper has since been produced by the special representatives of the United States and the European Union. It proposes a three-year period in which Kosovo can develop its own autonomous assembly and democratic local communes. That interim period would be followed by a review of the final status of Kosovo. I deeply regret that, three months further on, meaningful talks on that paper have not begun. The fault for that lies on both sides. Despite intensive pressure and repeated mediation, it still has not been possible to get agreement even on the composition of the Kosovo negotiating team. The main obstacle has been the refusal of the Kosovo Liberation Army to take part in any team that includes Dr. Rugova, the elected leader of the Kosovo Albanians.
Over the weekend, I discussed with Madeleine Albright and other colleagues within the Contact Group how we can restore momentum to the political process. We are proposing an early meeting of the Contact Group at the level of political directors, which the United Kingdom will chair.
We have also agreed on the key messages to both sides in this conflict. President Milosevic must be clear that military action last autumn was suspended only because of his agreement to cease fire, to withdraw part of his military units in Kosovo, and to return the rest to barracks. The North Atlantic Council met yesterday and agreed that General Clark and General Naumann, NATO's two most senior generals, should visit Belgrade with a clear message that President Milosevic must comply in full with the agreements he made.
On its part, the Kosovo Liberation Army has committed more breaches of the ceasefire, and until this weekend was responsible for more deaths than the security forces. It must stop undermining the ceasefire and blocking political dialogue. Neighbouring countries, in particular Albania, must be more resolute in halting the flow of weapons, which fuels the conflict.
Neither side can win this war. The Kosovo Liberation Army cannot defeat the Yugoslav Army, and instead of liberating the people of Kosovo can only prolong their suffering. Belgrade cannot end the conflict by atrocities such as we saw this weekend, which will only drive more young men into the ranks of the KLA and swell the ranks of those who demand independence.
The only way in which stability can be restored in Kosovo is through political dialogue. I urge both sides now to get down to meaningful negotiations on the basis of the Contact Group proposals. That is the best way in which the Kosovo Albanians can honour those who died in this appalling massacre, and in which Belgrade can show real regret at the actions of its security forces. That is also the only way in which we will prevent such atrocities recurring.

Mr. Michael Howard: I thank the Foreign Secretary for his statement. The whole House will share the shock and outrage that he expressed at the appalling massacre that took place at Racak on Friday, and will join in his condemnation. It was impossible to witness those scenes on television without being both deeply moved and deeply angered.
We also share the Foreign Secretary's desire for the International War Crimes Tribunal to be allowed to investigate this war crime and to bring to justice those responsible. Can he tell us a little more about how he proposes to achieve that objective? In November, the Minister of State told my hon. Friend the Member for Windsor (Mr. Trend) that he would ensure that the United Nations Security Council would take further action to implement resolution 1207. What actions have been taken, and what action is now proposed, to ensure full compliance with that resolution? Can the Foreign Secretary confirm that the economic sanctions agreed by the Contact Group last year are still in place? Is there any prospect of persuading other countries, including Russia, to join in imposing them?
I pay tribute, as did the Foreign Secretary, to the courage and commitment of the OSCE verification force. Can he comment on reports that, on Saturday, the OSCE assured the villagers of Racak that its teams would stay in order to deter the Serbs from attacking the survivors of the massacre, but that they were subsequently forced to leave by Serbian forces?
Was it not clear even before this activity that the October agreement had been breached? The violence had not ended, the military and interior police had not been withdrawn, full protection for civilians had not been secured and moves towards democratic autonomy had not taken place. What is the status of the agreement now, and what more can the Foreign Secretary tell us about the future of the OSCE representatives? How is their safety to be secured?
In October, the Foreign Secretary gave assurances that the verification force would be backed by NATO aircraft, and that together they would be able to monitor
every movement of the security forces.
Has that surveillance been carried out? Today's statement from NATO says that the activation orders for air operations remain in place. In October, the Foreign Secretary said:
The only way to ensure that Milosevic keeps his promises is to keep the credible threat of force hanging over him.
In November, he said:
We will react to any substantial breach of the ceasefire by Belgrade by reactivating the order to our military commanders to commence military action.
Can the right hon. Gentleman tell us where matters stand now? Has that threat been lifted, or is it still in place? If it is still in place, what prospect is there of its being implemented?

Mr. Cook: I thank the right hon. and learned Gentleman for endorsing the concern that is shared by hon. Members on both sides of the House about this terrible atrocity. He is right: we have experienced great difficulty in securing compliance from both sides with the Holbrooke package. The Kosovo Liberation Army has repeatedly broken the ceasefire, and, last month, seized a number of Serb hostages. On the other side, we have achieved an outcome that is unsatisfactory from our point of view, in that there are far more Serb military units out of barracks than there should be. The agreement provides for three companies to be out of barracks in Kosovo; at the last count, there were 12.
We maintain exactly the surveillance that I promised the House last November—although, as the right hon. and learned Gentleman will appreciate, the extent to which NATO aircraft can fly and observe depends in part on the weather and whether it is possible to observe what is happening on the ground. The Kosovo verification mission has given us instant, rapid, accurate information about the situation on the ground. It took us several months to discover the full details of the tragedy at Srebrenica, but within 12 hours we were able to establish the facts of what had happened at Racak. That has greatly helped us to produce a swift and robust international response. We will, of course, continue to monitor the safety of those verifiers—we have a particular duty to the British members of the verifier teams—to ensure that their safety is not put at unacceptable risk.
What happened at Racak yesterday is that verifiers were deployed. They acted properly and reasonably on the assurances that they had been given by Belgrade that Belgrade would co-operate with them in assuring the villagers that they would stay. I regret to inform the House that the local commanders flagrantly refused to co-operate, refused the representations by General Drewienkiewicz that they should not enter the village in force, proceeded to do so and then proceeded to shell the village. In those circumstances, I believe that General Drewienkiewicz was entirely correct to order the verifiers to leave. The fault lies with Belgrade for its failure to comply and to co-operate with the verification mission. That will be a central part of the discussions that Generals Clark and Naumann will have tomorrow in Belgrade.
Finally, I repeat to the right hon. and learned Gentleman—and to President Milosevic—that the actiration order or the actord remains in being. The


outcome of the decision in November is that it will require one political decision by the North Atlantic Council to trigger that actord. In the meantime, it remains in being and the planes remain on 96 hours' notice.

Mr. Donald Anderson: The activation of the NATO bombing is unlikely to make any serious contribution to a solution because no military solution will do that. Is there not the prospect, alas, of even further atrocities from both sides? Expressions of horror, however justified, and demands that something must be done do not amount to a strategy.
If, as my right hon. Friend has said, the strategy is to ensure the autonomy of the province within Serbia, that will surely imply pressure on both sides to the conflict. Is he prepared to commit, with our allies, the necessary personnel and pressure on both sides to ensure that?

Mr. Cook: I can assure my hon. Friend that pressure has been applied to both sides throughout. Part of the complexity, though, of applying pressure to the Kosovo Albanian side is that there are different perspectives from the elected leadership of the Kosovo Albanians around Dr. Rugova and from members of the KLA, who do not regard Dr. Rugova as someone from whom they will accept leadership or as a representative of their people. That makes it difficult to build a meaningful negotiating team from the Kosovar Albanian side.
My hon. Friend makes a fair point: any military action needs to be tied to a clear political settlement and a strategy to achieve that political settlement. A political settlement is on offer. It would enable Belgrade to withdraw from the conflict without further cost, loss of life or continued isolation in the world community. It would also enable the Kosovar Albanians themselves to proceed to govern their own affairs, including their internal security.
That is a prize for both sides. It is deeply frustrating for the international community that, despite vigorous pressure on both sides, we have yet to secure a single negotiating session between teams representing both of them.

Mr. Menzies Campbell: The atrocity is appalling, even by the standards that we have come to expect in the Balkans.
Can the Foreign Secretary confirm reports that there is continuing military action against the village of Racak by tanks and artillery of the Belgrade Government? If that is so, is it not a clear breach of the Geneva convention?
Does not the refusal of entry to the prosecutor simply pile provocation on outrage? Does the Foreign Secretary share the view that the continuing failure to allow access would rightly be seen as complicity by the Belgrade Government in the massacre and would undermine any moral authority that Belgrade might have to govern Kosovo?
Will the Foreign Secretary make it clear that, although NATO will not become the air force of the KLA, all of NATO's assets are available to protect the innocent citizens of Kosovo if they are subjected to deliberate aggression by the Serbian Government, and that United Kingdom forces are ready to play their part?

Mr. Cook: First, I entirely endorse the right hon. and learned Gentleman's comments on the appalling character

of the atrocity. I have heard of reports of military action today not around Racak itself, but around the neighbouring villages. I am not currently in a position entirely to confirm those reports, but I have to warn the House that they sound plausible. Regardless, we already know that there were vigorous actions by the Serb security forces on Friday and again—despite representations from the Kosovo verification mission—on Sunday. Therefore, already actions have twice occurred that are wholly unacceptable and are plainly in breach of the agreements that President Milosevic gave both to NATO and to the OSCE.
British forces are already playing a part in making those agreements a reality. We contribute aircraft to the air verification mission and the second largest national ground contingent to the Kosovo verification mission. General Drewienkiewicz is the chief of operations there, and our people are playing a key part in ensuring that the operation is successfully mounted. We also make a major contribution to the extraction force organised among European countries across the border in Macedonia, should we have to get the verifiers out.
In all those regards, Britain is playing a major part. We stand ready, of course, to consider what may be sensible in the future. However, any further military commitment in Kosovo must clearly depend on a political settlement between the two main parties. We cannot commit additional resources without knowing that both sides are committed to an outcome.

Ann Clwyd: As my right hon. Friend said, in all the time that we have been talking and using diplomatic methods, we have achieved very little. The peace talks have not yet even started, and I doubt that they will start. There would be very little agreement between the two sides, as there is very little agreement between them on anything. We have been patient long enough. Sooner or later, troops will have to go in. In my view, it should be sooner rather than later.

Mr. Cook: The position that the Government took—with much support in the House—was that, in the right circumstances, we would be willing to consider ground troops as part of the package that was brokered last autumn. Other countries within NATO said publicly that they were not prepared to make such a commitment. I do not think that the House would expect us to commit British troops in isolation from action by our major allies.
Currently, after the experience of the past three months—and as I just said to the right hon. and learned Member for North-East Fife (Mr. Campbell)—I should be very hesitant about committing ground troops in Kosovo unless there was a clear commitment by both sides to a political track. If we were to commit forces in the current situation, there is a danger that we would end up being the people keeping apart two sides, both of which seem intent on carrying out war and undermining the ceasefire. Those are not circumstances in which peacekeeping can operate. We shall first have to see some evidence of good will, good faith and a strong commitment to a political negotiation.
If my hon. Friend the Member for Cynon Valley (Ann Clwyd) studies with care the detailed paper prepared by the Contact Group, she will note that it contains much common ground for both sides. I commend Christopher


Hill on the way in which he has patiently taken account of the views of both sides. Most of the argument rests on what will happen after the three-year interim period. I tell both sides, particularly the Kosovar side: for heaven's sake, let us not make what happens three years from now prevent us from getting on with seizing agreement that can secure stability in the short term and lead to the basis for peace in the long term.

Mr. Martin Bell: Does the Foreign Secretary agree that perhaps the time has come—as it did earlier, in the Bosnia conflict—when we have a difficult decision to make, which is either we stay all the way out or we get all the way in? We either say to ourselves, "That is a far away country of which we know little and care less—let them kill each other to the last drop of blood", or, with the French and our other allies, seriously prepare an active intervention force.

Mr. Cook: No one could possibly accuse the Government of treating Kosovo as a far away country of which we know little; on the contrary, we are more committed than any other European country. Kosovo is part of the European continent. Europe itself cannot have any pride or any rest while there is such instability and such atrocity immediately over the borders of the European Union.
However, I advise the hon. Gentleman not to be too glib in demanding an expeditionary force. What is the expeditionary force to do? Is it supposed to take on the KLA as well as the Serb security forces? In the present circumstances, it would have to be prepared to do that. The only casualty that the verification mission has sustained so far was from a shot by the KLA. We would have to consider with great care the commitments that we had from both sides and the political process that we were seeking to support by our presence on the ground.

Mr. Tony Benn: I thank my right hon. Friend the Foreign Secretary for the balanced way in which he presented the background against which the hideous massacre occurred. I ask him to resist those who believe that there is an easy way out through the invasion of Serbia by Britain—the United States would not send troops. There is no provision which says that Britain, the European Union or NATO is the policeman of the world. Hideous atrocities occur in many countries: there is injustice to Palestinians and to Kurds; there are injustices all over the world. Success will come through negotiated settlements. I detected from his answer that my right hon. Friend believes that that might form the basis of a durable solution.

Mr. Cook: 1 entirely agree that there are no easy answers. If there were, we should be making rapid progress to implement them. I also agree that it is important to focus on getting momentum behind the political track and trying to achieve agreement between both sides, but I am conscious that only the credible threat of military force, if necessary, is likely to engage both sides in dialogue. We need to get that balance right.

Sir Peter Emery: Will the right hon. Gentleman use as support the resolution that was passed in Vienna on Friday by the 55 nations of the Parliamentary Assembly of the Organisation for Security

and Co-operation in Europe? It was jointly sponsored by the Russians and the Americans and called on all parties in Kosovo to co-operate with the International War Crimes Tribunal to investigate possible crimes against humanity. It says:
Those who refuse to co-operate with international efforts should face consequences and be held accountable for their acts.
It goes on:
We call upon the leadership of the OSCE … to take appropriate measures to provide protection and security for mission personnel.
The Russians were even willing to add:
One of these measures is the extraction force deployed in the Former Yugoslav Republic of Macedonia.
There was unanimous agreement that the whole of Europe should act positively to bring pressure to bear on Serbia. Even the French agreed.

Mr. Cook: I welcome the right hon. Gentleman's comments. The OSCE can take some satisfaction from the way in which it has risen to this difficult and complex task. I pay particular tribute to my opposite numbers, the Foreign Ministers of Poland and Norway, who have presided over the OSCE during this period. I should like to reinforce strongly one point that the right hon. Gentleman made: individuals have to be held to account for their responsibility for the crimes that they commit. We have to escape from the idea that because the victims belong to a different ethnic group such actions are not crimes and their perpetrators will be immune from prosecution. The only way to escape from that vicious cycle is to make it clear that we shall hold individually responsible those who commit war crimes. All those serving in Kosovo are on notice that they will be held individually to account for their actions.

Mr. David Winnick: Is it not clear that, as in Bosnia, the Serbians involved will not hesitate to commit atrocities—as over the weekend—against civilians, quite regardless of international protests and the International War Crimes Tribunal? Has not the time come to stop giving warnings to Belgrade and instead to act along military lines and bomb Serbian military installations? I ask my right hon. Friend a question that is bound to be asked by Muslims in Europe and elsewhere—are the lives of Muslims worth less than those of other people?

Mr. Cook: I would certainly rebut totally any suggestion that we hold the lives of Kosovar Albanians or Muslims any more lightly than the lives of anyone else. The purpose of my statement today was to underline the enormous gravity that we attach to this terrible atrocity. I sense from the House that that sense of shock and revulsion at what has happened is shared by everybody within the House. As I have said, the actord remains in place, and it requires only one political decision to trigger it. Generals Clark and Naumann will be spelling that out to President Milosevic tomorrow, when they demand full compliance.
I repeat that it is vital that we find and bring to justice the individuals who carried out this war crime. Bombing other Serb installations would not be the appropriate or right way of getting hold of those who committed this crime. Belgrade has an opportunity to distance itself from


the crime by co-operating and bringing to justice those who committed it. If they refuse to do so tomorrow, they will become complicit in the crime.

Mr. Nicholas Soames: I, too, express my admiration for the astonishing bravery of the verification force, which is carrying out an extremely difficult task under hazardous conditions. May I warn the Foreign Secretary that as the weather improves, so the fighting will intensify—as it always does in the Balkans—that substantial arms are flowing to the KLA and that the Serbs have no intention of backing down? Is it not clear, therefore, that we should now consider with our partners and colleagues whether the verifiers should be armed to look after themselves in self-defence? Finally, will the Foreign Secretary assure the House that Generals Clark and Naumann will not be putting forward sanctions against the Serbs tomorrow that they will not willingly undertake when the circumstances require it?

Mr. Cook: I can assure the hon. Gentleman that anything referred to tomorrow carries with it the authority of the North Atlantic Council and the commitment to see it through. I endorse and second the hon. Gentleman's praise for the courage of the verification mission. It takes an enormous commitment to go unarmed, and in lightly clad vehicles, into such hazardous situations.
I agree with the hon. Gentleman about the danger of tension rising as the weather improves. That is precisely why, back in November, we were anxious to make as rapid progress as possible on the political track so that, by the time the spring thaws came round, we could have changed the political facts on the ground. That is exactly why I am so worried that we have not been able to get meaningful negotiations under way, and why we will be meeting this week—and, perhaps, again next week—to see what momentum we can put into that political track to provide a clear perspective and the hope that by the spring there will be an alternative to military conflict in Kosovo.
Finally, although we must maintain careful scrutiny of the safety of the verifiers, we would be extremely reluctant to go down the path of arming individual verifiers, as suggested by the hon. Gentleman. Let us remember that Racak was brought under mortar and heavy machine gun fire yesterday, which obliged the verifiers to leave. Light sidearms would be of no use in those circumstances, and might well only attract attack.

Mr. John Austin: I thank my right hon. Friend for his statement and I pay tribute to the verification mission. He indicated that the way forward is a political settlement, based on autonomy for Kosovo. Does he recall that, under the 1974 constitution, the Kosovar Albanians had their own national assembly, national bank and supreme court, had equal representation on the Yugoslavian presidency and in the assembly and had equal status with Serbia and the other republics in economic decision making? Does he share my view that nothing less than what they had under that 1974 constitution would be acceptable to them now? If such autonomy was on offer, could it be guaranteed by

an unarmed verification mission, given the fact that Milosevic was the person who stripped the Kosovars of that autonomy?

Mr. Cook: My hon. Friend is absolutely right: the root of the conflict and of the tragedy at the weekend was in the decision taken by President Milosevic to remove the autonomy that Kosovo had previously enjoyed. Any outcome of the political process must at least restore to Kosovo the same degree of autonomy that it has enjoyed historically. It is not a simple matter of turning back the clock, because the period to which my hon. Friend referred was the period in which Yugoslavia existed, so Kosovo enjoyed its autonomy within a much wider state than the present small bounds of Serbia. That is why, ultimately, if we want to secure a democratic and self-governing Kosovo, we must also ensure that it exists within a democratic Serbia that respects freedom of expression and human rights.

Mr. John Randall: We are all aware of the sanctions and threats that have been used against Belgrade. As the Foreign Secretary said that responsibility for the breakdown of the ceasefire could be placed equally with the Yugoslav forces and the KLA, what sanctions and threats could be used against the KLA?

Mr. Cook: We have vigorously denounced the KLA in just about every international forum. We have also, through Security Council resolutions, called on states neighbouring Kosovo and on others in Europe to act to try to cut off the flow of both funds and weapons to the KLA. We are actively reviewing what more we can do to apply pressure to the choke points in the supply of weapons to the KLA. We are not dealing with a state or, indeed, an organisation with any clear political leadership or representation, so it is much more difficult to apply effective pressure, especially when the KLA refuses to take part in negotiations.

Mr. Tam Dalyell: I thank my right hon. Friend for the tone and caution of his statement. If there is to be a 96-hour warning period before military action—if that happens, heaven help us—will there be an opportunity for a serious discussion in the House of Commons on a matter that has great long-term consequences? What is the attitude of the west towards the further break-up of the Yugoslav state? What is our policy on that?

Mr. Cook: First, I want to clarify one point because I would not want the House to be under any misapprehension: the 96 hours to which I referred is the period of notice in which planes are on standby; it is not necessarily the same as a 96-hour warning period. I have reported to the House repeatedly on the situation in Kosovo and elsewhere in the former Yugoslavia, and I can give my hon. Friend an undertaking that we will certainly continue to do that before events achieve any worse momentum than at present.
My hon. Friend asked about a break-up. The position taken by the international community in all its different manifestations—including the European Union, the Contact Group and the Security Council—is that we do not support independence for Kosovo. That is partly because the countries in the neighbourhood would


strongly resent and resist any attempt to establish an independent Kosovo because of the destabilising effect on themselves—and we should always remember that the agenda of the KLA is not independence for Kosovo, but a Greater Albania. It would also have an effect in Bosnia about which all hon. Members should be concerned: it would be very difficult to resist the demand of Republika Srpska for independence if Kosovo were to succeed in achieving it.
For all those reasons, we have resisted the calls for independence for Kosovo, but the persistent non-compliance by President Milosevic, and atrocities such as those that happened this weekend at Racak, make it extremely difficult for us to convince the people of Kosovo that they have a future short of independence.

Mr. John Wilkinson: Notwithstanding the Foreign Secretary's last remark—and I recognise the importance of the statement that he has made in the vexatious circumstances following the gruesome massacre in Racak—I hope that he will not preclude any ultimate political outcome. Although the interim period is for three years, the right hon. Gentleman has not defined or clarified in any meaningful sense the objective that the Government are working to achieve at the end of that period. Could it not be that, eventually; self-determination will prove to be the only durable settlement?

Mr. Cook: The Christopher Hill paper contains provision for a review at the end of that three-year period. However, the contention over how strong that review should be is at the heart of the disagreement between Belgrade and the Kosovar Albanians about the Hill paper. It will be difficult to find an outcome in which both sides can agree to common words in the review at the end of the three-year interim period, yet I believe that the immediate way forward for the Kosovar Albanians is to engage in the process of creating autonomous, self-governing and democratic institutions during that period. It is very frustrating that, so far, we have been unable to construct an Albanian negotiating team that is willing even to discuss that.

Mr. Vernon Coaker: Will my right hon. Friend continue to take the strongest possible action to ensure that President Milosevic is aware of our horror at what has happened and our determination to act when necessary?
I was in Kosovo a few weeks before Christmas with UNICEF. Although we are talking today about the horror that occurred at Racak, the horror in Kosovo has been going on for months. Many people there feel that the Serbian Government's aim is to cleanse Kosovo of the ethnic Albanians.

Mr. Cook: My hon. Friend is absolutely right to stress the widespread suffering and hardship experienced in Kosovo as a result of the repression organised by Belgrade. Among the most distressing features of the security force's actions last autumn were the destruction of the harvest. in the fields and the shooting of farm animals in their barns. There is no doubt that the intention was to make it more difficult for the Kosovar Albanians to get through the winter.
We remain strongly committed to humanitarian relief and, as a nation, we are doing as much as any other to support such work in Kosovo. Events such as those of last weekend make it much more difficult to get on top of the problem. We believe that at least 5,500 additional refugees were created in the region by those events.

Mr. Julian Brazier: Will the Foreign Secretary bear in mind the words of the right hon. Member for Chesterfield (Mr. Benn), who reminded the House that horrible atrocities are being perpetrated in a number of countries and that Britain cannot become the world's policeman? Are we not faced with just another example of Britain committing our overstretched armed forces to a mission that lacks a clear and long-term military objective? What would the Foreign Secretary tell the wife, mother or family of a member of the British verification team if that member were seized by a kidnapping group, given that he would not have had any kind of weapon with which to defend himself?

Mr. Cook: I must tell the hon. Gentleman that there is no question of Britain being the world's policeman, but we are proud of the way in which we play our part and make a major contribution to the world community. We participate in events in the former Yugoslavia, in Bosnia and in Kosovo as a member of the North Atlantic alliance and as a permanent member of the United Nations Security Council. We cannot expect to retain our position as a permanent member of that council—and the respect that goes with it—and as a major member of the North Atlantic alliance if we are not willing to take part in actions when mounting such actions is deemed necessary.
In respect of the hon. Gentleman's question about the Kosovo verification mission, it is not for me to answer on my own—it is also for the mission's members. In a spirit of humility, I refer the hon. Gentleman to the various statements that they have made over the weekend, in which they have made it clear that they are determined to get on with the job, that they are sorry to have pulled out of Racak and that they are proud of what they are doing. I think that we should be proud of them.

Mr. Malcolm Wicks: Is it not extraordinary and tragic that a 20th century that was scarred by Nazi genocide is ending not only with the recent genocide in Bosnia, but with the current atrocities in Kosovo? Despite the complexities, which we understand, is there not one common factor—Milosevic himself, who, time and again, has shown himself to be the puppet master of evil in the former Yugoslavia? Why do we treat him as a statesman and not name him as a war criminal? Would the Government support efforts by the International War Crimes Tribunal to try Milosevic for his crimes, for which he is responsible?

Mr. Cook: It is for the prosecutor of the International War Crimes Tribunal to decide whether to indict any citizen or politician in the former Yugoslavia, and that is a matter that that body must address. If any member of the regime in Belgrade or elsewhere in the former Yugoslavia were to be indicted, we would, as we do on all other occasions, support the tribunal's right to make that indictment and support the case for a trial.
However, the important aspect of my hon. Friend's question is not simply the issue of the personal responsibility of President Milosevic, but the


backward-looking and poisonous ethnic hatred that makes up the politics of so much of the regime in Belgrade. That is why, as part of our response to the problems of Kosovo and Bosnia, we have persistently said that there must be freedom of expression, a free media and genuine and meaningful democracy in Serbia as a condition of Serbia taking its place in the modern world and the modern Europe.

Dr. Julian Lewis: In endorsing every word of the question asked by the hon. Member for Croydon, North (Mr. Wicks), may I ask the Foreign Secretary whether he and his advisers believe that President Milosevic either authorised, or at least approved after the event, the massacre that has just taken place? If the right hon. Gentleman thinks that President Milosevic backs those terrible murders, what does he think the motivation is? Could it be to terrorise the local population, to drive them out of Kosovo, or even to test NATO so that Milosevic can see how many murders NATO is prepared to put up with before taking action, as it eventually and belatedly did in Bosnia?

Mr. Cook: I repeat to the hon. Gentleman what I told my hon. Friend the Member for Croydon, North (Mr. Wicks)—the indictment of an alleged war criminal is not a matter for me or for the Government, but one for the prosecutor of the International War Crimes Tribunal. It is for her to decide whether there is a case to answer. I have no evidence of the sort the hon. Gentleman seeks. The important point is that Belgrade now has an opportunity to respond in a positive way to international representations. If Belgrade did not order the massacre, if it is not complicit in the massacre and if it shares our concern about the number of civilian deaths, Belgrade can now prove that by allowing the International War Crimes Tribunal to carry out a thorough investigation.

Mr. Dale Campbell-Savours: Is not the bottom line the fact that the KLA, in pursuing its objective of a Greater Albania, is making decision taking in NATO extremely difficult? If, at the end of all this, NATO cannot take any military action in Kosovo, the KLA will be solely to blame because it will have prevented such action.

Mr. Cook: As I have said on more than one occasion this afternoon, there is fault on both sides and the KLA must accept its responsibility for the present situation because of its repeated breaches of the ceasefire. At the same time, we cannot escape the clear and stark conclusion that primary responsibility for the massacres that occurred this weekend lies with the security forces that were in the village at the time.

Mr. Keith Simpson: The Foreign Secretary has spelt out the options and difficulties facing him and other members of NATO, and the House understands those. However, if there is, as appears likely, another example of a massacre initiated by the Serbs, what deterrent value will the threat of air strikes against Serbia have?. I might be misinterpreting the Foreign Secretary, but it seems to me that he is ambivalent about whether air strikes would achieve their objective. Many hon. Members are concerned that, ultimately, we will keep

threatening military action and the Serbs will not be impressed. That will have an immediate impact upon the independence and the lives of the British people who constitute the verification force.
This may be an unfair question to ask the Foreign Secretary, but I suspect that it is much in the minds of the families of those who are serving in the verification force. What guarantee do we have that the British and French-led extraction force will achieve its objective of entering Kosovo and removing members of the verification force if the situation gets completely out of hand?

Mr. Cook: The extraction force is there specifically with that mission in mind. It is training for that mission and preparing plans for it. I cannot give a guarantee that any military action of that character will be 100 per cent. successful—and the hon. Gentleman would not believe me if I attempted to do so. However, that is the extraction force's mission, and we believe that we have provided a significant contribution that will assist the force in carrying out that mission.
However, our first task is to try to prevent circumstances arising in which that contingency plan will be necessary. That is precisely why the two most senior generals in NATO will be in Belgrade tomorrow giving a firm message to President Milosevic. The hon. Gentleman and President Milosevic should be in no doubt about our commitment to ensuring that we both defend our people who are part of the Kosovo verification mission and insist upon President Milosevic's compliance with the undertakings that he gave to Richard Holbrooke.

Mr. Ben Bradshaw: Would not the Foreign Secretary's claim that he wants those responsible for war crimes to be brought to book carry a little more weight if he were willing to encourage proactively the International War Crimes Tribunal in The Hague to indict President Milosevic, who many believe is the biggest war criminal of all? After all, he gives the orders. Are not the hon. Member for Tatton (Mr. Bell) and some Labour Members absolutely correct to assert that we now face a desperate and unenviable choice: either withdraw completely, wash our hands of the problem and witness a blood bath or perhaps a wider Balkans war; or be willing to commit ground forces?

Mr. Cook: I have repeatedly made it clear—and not only today—that President Milosevic plainly carries political responsibility for much of what has happened throughout the former Yugoslavia over the past decade. It is not for me to judge whether that makes him criminally culpable—nor am I in the right locus to do so. That is a matter for the International War Crimes Tribunal and for the prosecutors to decide.
The tribunal is in no doubt about the very strong support that it receives from the British Government, and it said so to me when I visited it in The Hague last Wednesday. During that visit, I released another £120,000 to assist the tribunal with translating documents from Serb or Croat in order to allow it to continue its work. This Government, more than any other, are supporting the tribunal with personnel, funding, witness support schemes and an additional court room. We shall continue to give vigorous support to the tribunal's very important work.

BILLS PRESENTED

ENERGY EFFICIENCY

Mr. Clive Efford, supported by Mr. John Austin, Ms Julia Drown, Mr. David Chaytor, Mr. David Lepper, Mr. Peter Bottomley and Mr. Matthew Taylor, presented a Bill to make further provision for energy efficiency: And the same was read the First time; and ordered to be read a Second time on Friday 26 February, and to be printed [Bill 32].

ENERGY CONSERVATION (HOUSING)

Mr. Clive Efford, supported by Mr. John Austin, Ms Julia Drown, Mr. David Chaytor, Mr. David Lepper, Mr. Peter Bottomley and Mr. Matthew Taylor, presented a Bill to make further provision for energy conservation related to housing; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 26 February, and to be printed [Bill 33].

Opposition Day

[3RD ALLOTTED DAY]

NHS (Rationing)

Madam Speaker: I have selected the amendment in the name of the Prime Minister.

Miss Ann Widdecombe: I beg to move,
That this House recognises that rationing has always been a part of how the Health Service manages health care resources; expresses its dismay at the comments of the Right honourable Member for Dulwich and West Norwood denying the obvious fact that rationing exists in the Health Service; expresses grave concern at the proposed changes to be effected by Her Majesty's Government, which through bureaucratic bodies such as a National Institute for Clinical Excellence and a Commission for Health Improvement will force clinicians to carry the burden on rationing decisions; recognises that the availability of modern drugs for conditions such as schizophrenia and MS makes clear the reality of rationing in today's Health Service; recognises the fact that waiting lists are a hidden form of rationing; notes that excessive political concentration upon waiting lists has been largely responsible for the continuing winter crisis in the Health Service, over which Her Majesty's Government appears wholly complacent and unconcerned; and urges Her Majesty's Government to acknowledge the concerns of professional bodies such as the BMA over rationing and embark upon a mature debate on the future of the Health Service.
I believe that we need to debate rationing in our health service today more than at any other time in its history. I am greatly encouraged to see that the amendment submitted by the Liberal Democrats is almost the same, word for word, as our main motion. In his endeavours to spin Government reaction before the debate, the Secretary of State for Health told the press that this was some deep-seated right-wing plot. I have many views about the hon. Member for Southwark, North and Bermondsey (Mr. Hughes), but by no stretch of the imagination could he be described as a right-wing plot. Indeed, I would submit that our motion and the hon. Gentleman's amendment are the same in that they strongly reflect the views and concerns of the general public, and their longing for a clear and grown-up debate about rationing.
Our health service is currently embroiled in one of the worst winter crises to hit our hospitals for many years. It is not only the Conservative party that is saying so, but the British Medical Association and the Royal College of Nursing. Now, even the Secretary of State is at last prepared to admit that our hospitals cannot cope with the added pressure that the Government have placed on them.
That sudden rush to accept culpability does not extend to the Prime Minister or his press secretary. Reporting the glad tidings of our Prime Minister's descent on St. Thomas's hospital last week, his spokesman told us that the Prime Minister
did not come away thinking that the Health Service is in a crisis.
"Crisis? What crisis?" seems to be the attitude emanating from Downing street.
The increasing difficulties being experienced in our health service have underlying causes that are far more serious than the recent flu outbreak, which, I remind the Secretary of State, has at no time escalated to epidemic


proportions. He will remember that he claimed that in the absence of such an epidemic or an exceptionally harsh winter, the service could look forward to the winter with confidence. Where is that confidence now? The Government's increased rationing of clinical services, coupled with their pressure on hospitals to force through quick, simple waiting list cases, have been a double whammy against the ability of our health service to cope with the wholly predictable increase in winter pressures.
The Secretary of State will remember, because I have reminded him of it, his party's pledge in 1996 to set up a task force on trolleys and to monitor the number of patients forced to wait for treatment in that manner. The Labour party may have broken its pledge, but not to worry because we have been monitoring the situation that caused so many sleepless nights for the right hon. Member for Camberwell and Peckham (Ms Harman). I have to inform the Secretary of State that the situation is far worse than he could ever have imagined in his complacency.
A patient died, waiting in pain, on a trolley at St. George's hospital in London. His consultant described the conditions as the worst that he had seen in 20 years, with the standard of care being worse than in India. An elderly man died of heart failure in Whipps Cross hospital after waiting over 18 hours on a trolley. A child died from meningitis after being left on a trolley for hours in Rotherham general hospital because there was no bed.
Bodies were stacked up in refrigerated lorries at two hospitals in Norwich and at the Derbyshire Royal infirmary because there was nowhere else to keep them. A patient's body was lost for five days in the grounds of Chase Farm hospital, Enfield, after he had walked out of the ward and fallen into a ditch. At two Portsmouth hospitals, relatives were forced to provide basic nursing care for their loved ones for the first time in the history of our health service.
The Prime Minister has the barefaced cheek to deny that that is a crisis. Perhaps he might have been right if his Government had not closed 679 hospital beds in London alone during 1998, after years of telling us that London needed more, not fewer, beds. It is now clear that such decisions and the obsession with Labour's fiddled waiting list pledge have led directly to the shocking events of the past month.
I wonder if the Secretary of State recalls what Baroness Jay said shortly before last winter? She said:
We won't see a return to a situation where people are being helicoptered around the country in search of an Intensive Care bed.
I would be only a few weeks out of season if I said, "Ho, ho, ho." What about the shameful case of the elderly patient at Hemel Hempstead hospital? The right hon. Gentleman obviously finds that case funny; we shall find out whether the rest of the House does. The Secretary of State plans to close that hospital's brand new accident and emergency department. That patient was suffering from a potentially fatal respiratory infection, and had to be airlifted 150 miles in agony all the way to Somerset. How can the right hon. Gentleman even attempt to wriggle out of responsibility for much—not all—of that state of affairs?
It is clear that the concentration of resources on waiting lists and the climate of fear that the Secretary of State has created among clinical and managerial staff has harmed

other sectors of our health service, led to increased rationing and resulted in this disastrous winter. He will be aware that not just we, but the British Medical Association, which for many months and not only with the wisdom of hindsight, has been claiming that his obsession with numbers on waiting lists—not even waiting times—is distorting clinical priorities. In the words of the British Association for Accident and Emergency Medicine,
the principal reason is the emphasis placed on allocating resources to waiting lists, which has resulted in a reduction of beds for emergency cases".
Let us take instead the words of the British Medical Journal.
The government's emphasis on reducing waiting lists… has caused difficulties in coping with emergency cases".
If that is too esoteric for the Secretary of State, let him try the words of a ward manager, nurse Helen Truscott, who works at St. Mary's in Paddington. She said:
There is a crisis in the Health Service, but it's not just in the winter, it is now all the year through. A few years ago we would have had some spare beds on the ward overnight. Now we've got patients left lying on trolleys in casualty.
If the Secretary of State is in any doubt that that is due to his Government—the Government who gave voters before the election 14 days to save the NHS—all he has to do is listen to doctors and nurses, in whose minds there is no doubt about who is responsible.
I shall now be very kind to the Secretary of State. [HON. MEMBERS: "No."] Yes, I shall. He will remember that, a few weeks ago, I made a promise to him. I said that if he abandoned his ridiculous obsession with raw numbers on lists and instead concentrated on waiting times, and if, in addition, he used not just crude cut-off times but made those times relevant to conditions, as the BMA has asked, I would not gloat but say, "Well done" and support him. I renew that promise today—though more in hope than in faith.
I ask the Secretary of State also to face up to reality. We have been saying for some time that there are no easy solutions of the kind that his party promised in opposition. I go so far as to say that, in opposition, his party deceived Britain. His party said that there was nothing wrong with the NHS other than a Tory Government. It said: "All you have to do is change the Government and we, Labour, will put it all right. The NHS will be able to do it all. It will be able to meet expectations and look forward to endless winters with confidence. All you have to do is vote Labour." Let the right hon. Gentleman look around him at the results of voting Labour. There never were easy solutions. A one-eyed concentration on waiting lists has not helped; nor has the complacently late payment of winter pressures money.
However, such matters are not the cause of deep-seated and underlying problems, which the Secretary of State's Government have persistently refused to acknowledge, always pretending that the health service can do it all and that, somehow, it has a magic wand. They have always pretended that the health service can meet every last demand, provide every new treatment and supply all the very latest drugs—all in the face of increasing demand and accelerating technology.
The Government can have no credibility, given that the Minister for Public Health, who is not present, can stand


at the Dispatch Box glibly and fatuously stating that there is no rationing in our health service. I asked her, in perfectly simple terms:
Is there rationing, or is there not?"—[Official Report, 15 December 1998; Vol. 322, c. 746.]
She replied, "No." She did not qualify her answer; she did not enlarge upon it. "No", she said and sat down, looking as though she had said something wonderful.
Far be it from me to embarrass the Minister, especially when she is not present, but it seems that she is so far out of step with medical opinion that even the normally restrained Doctor magazine felt moved to complain that the Government were like—I quote the editorial—[Laughter.] Well, this is the GPs' view. The magazine said that the Government were like
A child hiding under the bedclothes".
[Interruption.] I shall repeat that, because Labour Members do not want to hear it. They are going to hear it, and people listening to the debate are going to hear it, because it represents the views of the profession on the absolutely inaccurate statement by the Minister for Public Health.
The profession says that the Government are like
A child hiding under the bedclothes…imagining the problem of rationing is a monster that will go away if it refuses to acknowledge it.
The editorial said that the right hon. Lady was "embracing a laughable pretence", that the Government's denial made them a "laughing stock" and that the Government should be
mature enough to concede that the NHS is not equipped to cope with demand".

Mr. Hilton Dawson: Will the right hon. Lady give way?

Miss Widdecombe: I shall finish this selection; then I shall remember the hon. Gentleman.
Let us find out whether the absent Minister is prepared to stand by those comments. I shall ensure that she gets a copy of Hansard just in case. Does she disagree with Professor Sikora of the World Health Organisation, who says that terminally ill cancer patients in Britain have to pay thousands of pounds for life-prolonging drugs because of lack of cash? It has long been the case that doctors rank cancer cases on the chances of an effective cure or a lengthy prolongation of life. Why do the Government deny that that is rationing?
Dying breast cancer patients are paying £12,000 for a six-month course of Taxol. Patients with cancer of the colon are paying £8,000 for Ironotecan. Lung cancer victims are obliged to find £6,000 for Gemcitabine. Professor Thomas of the university of Surrey says that she has cash disputes with the health service on behalf of patients every two to three weeks.
If the Minister for Public Health does not find the World Health Organisation convincing, perhaps she will listen to the National Schizophrenia Fellowship and the Bethlem and Maudsley hospitals. They tell us that mentally ill patients are being given drugs, developed in the 1950s—such as Haldol—that have crippling side-effects. Even 1970s drugs—such as Clozapine, which is not without its problems—are being rationed. As for obtaining the latest atypical anti-psychotics, such as

Risperidone and Olanzapine, those were usually found to be prescribable only in the last resort, when all other drugs had failed.
Surely the Minister for Public Health and the Secretary of State are no longer prepared to make the ridiculous statement that there is no such thing as rationing in our health service. If they are, perhaps they would like to explain that to Mrs. Goldsworth, who has had to re-mortgage her home for £100,000 to pay Frenchay hospital in Bristol for supplies of beta interferon, to keep her out of a wheelchair.
We are not just talking about drugs. Routine operations are no longer available in many health authorities. The Secretary of State knows all about the unavailability of non-acute varicose vein operations. He knows that in some areas, one cannot obtain operations on lipomas and sebaceous cysts, and he also knows that, however much he may like to pretend otherwise, waiting lists are a form of rationing by queue. Until we have an honest—and mature—debate on rationing, we shall never tackle patients' increasing disillusionment with our health service.

Mr. Dawson: I thank the right hon. Lady for giving way. It is important that we should have a mature debate about some of the most serious issues in our country. Will she aid the cause of such mature debate by acknowledging, as gently as she can, the contribution of the previous Government over 18 years to what she calls the serious underlying problems of the national health service? Will she raise the level of the debate so that she does not concentrate quite so much on the difficulties caused to individuals and on trying to take cheap press opportunities by going to hospitals—

Mr. Deputy Speaker (Sir Alan Haselhurst): Order.

Mr. Dawson: —in the constituency of my right hon. Friend the Secretary of State—

Mr. Deputy Speaker: Order. The hon. Gentleman must sit down when I am on my feet. That is going beyond an intervention and becoming a mini-speech.

Miss Widdecombe: Even the part of the hon. Gentleman's remarks that might be identified as an intervention did not take us very far forward, I regret. He asked me to acknowledge the contribution of the previous Government. I shall indeed acknowledge their contribution: the single biggest hospital building programme in history, a steady increase year on year in real terms in NHS resources, nurses pay up 67 per cent. in real terms, 55,000 more nurses and midwives than we inherited, and millions more patients being treated. That is the contribution that we made. What I have—

Mr. John Heppell: rose—

Mr. Dawson: Will the right hon. Lady give way?

Mr. Deputy Speaker: Order. It would be for the general good, particularly of those listening beyond this place, if the debate were conducted in a sober and serious manner. The hon. Gentleman must not interrupt or reply to his own question.

Miss Widdecombe: The hon. Gentleman may like talking to himself and replying to his own question. He obviously does not like my reply.
Despite that significant contribution, and despite the fact that our national health service is still the envy of the world and that we looked after it for two thirds of its existence, I have never claimed that we had a perfect NHS, or that there were not many problems that we had to confront, for which we had no magic wand.
The essence of my argument is that there have been problems of rationing in the NHS since the time of Bevan. I am trying to get the Government to acknowledge that we are not in some new era in which that does not apply, and that we need some radical and fresh thinking. That is the thrust of my remarks.

Mr. John Bercow: I am grateful to my right hon. Friend for giving way, as she is developing a powerful case. Does she agree that progress in the health service will be retarded by the Government's creation of a plethora of new bureaucratic bodies, including the advisory committee on resource allocation, the commission for health improvement, the capital prioritisation advisory group, the national institute for clinical excellence and, last but not least, the primary care groups? Does my right hon. Friend agree that Ministers should stop pushing paper and start providing for patients?

Miss Widdecombe: My hon. Friend is right. The deep-seated problems that we face are essentially the problems of a successful service that has expanded vastly, beyond anything foreseen by its founding fathers, and which now has the ability to do what would have been science fiction to Bevan and Beveridge. That very successful service has produced a huge gap between demand and the capacity of supply to keep up with it. I agree with my hon. Friend that no amount of reorganisation, creation of extra bodies or new bureaucratic systems will tackle the underlying problem.

Mr. Simon Hughes: rose—

Miss Widdecombe: I shall give way to the spokesman for the Liberal Democrats. However, because we had, for perfectly sensible reasons, a statement on Kosovo, our time for this debate has been severely truncated. When I have taken the hon. Gentleman's intervention, I shall take no more.

Mr. Hughes: I am grateful to the right hon. Lady. I share with her both the clear view that there is rationing in the health service—I therefore welcome this debate—and the desire for a mature debate across the parties on how we resolve the problems that follow from that self-evident proposition.
I shall ask the right hon. Lady one linked question, which clearly follows, for her. Does she accept that if we are to meet the needs—not the demands—of our people, there will have to be a considerable increase in resources for the health service, which means tax increases, or does she hold to a position that there should be no more tax increases, and that therefore the only way of resolving the

problem is for some of the people who currently use the NHS to leave and go to the private health sector, as she argued at her party conference?

Miss Widdecombe: Ah, but there is, in the sensible use of the phrase rather than the Government's use of it, not a third way, but another way, which I shall discuss as I develop my theme.
If we do not have a mature debate on rationing, we shall not be able to tackle the increasing disillusionment with the health service that is felt by patients and those who work in the NHS, and we shall not do much to create a sustainable health service. The NHS last year celebrated 50 years of its existence. I should like to think that there will be celebrations again in 50 years, but that means creating a sustainable service, which cannot be done through wish fulfilment and by burying our heads in the sand, rather than dealing with the real problems.
The Secretary of State must take some responsibility for the existing disillusionment. Labour told people that the health service could do it all. Indeed, he boasted in a television programme in which we both took part that he could make the NHS so wonderful that people "have to be mad" to go private. That represents another 700,000 operations a year which he believes the NHS can encompass, when it cannot even cope with a flu outbreak in winter. Moreover, the right hon. Gentleman has inflated everyone's expectations with his extremely creative accounting in relation to the size of the comprehensive spending review.
Let us consider the matter realistically. The Secretary of State admitted on 16 July last year in response to a parliamentary question that the real size of the increase was not £21 billion, but £10.5 billion. Had we used the same fanciful method of accounting that he uses, whereby sums are double and treble counted, we would probably have ended up spending more than £100 billion. Would anyone have believed such fanciful nonsense? He should stop trying to con people that the health service is awash with money. This winter proves conclusively that it is not.
If the Government are determined simply to use bodies such as NICE and CHIMP to force clinicians to carry the can for rationing decisions, we shall not make much progress. Decisions on clinical priorities should be taken by clinicians, but the frameworks in which those decisions take place should be a matter of public debate and accountability.
The public do not want their intelligence continually insulted by a Government who tell them that there is no rationing, when they know jolly well from their everyday experience that there is plenty of rationing. The fact that the public want more means that we must look for new and imaginative ways of funding some of the modern health care innovations that patients are demanding—the innovations that the Government are finding it impossible to fund by traditional means alone, alongside the core functions of our health service.
I challenge the Government to stop being ideological. They like to speak glibly of bringing down Berlin walls in our health service. At the same time, they dig a grand canyon between the public and private sectors. They cannot bring themselves to accept—I think that the hon. Member for Southwark, North and Bermondsey (Mr. Hughes) has a similar problem—that private medicine has


benefits for the entire community, despite the role that the private sector is currently playing to bail out our troubled NHS this winter and before.

Mr. David Hinchliffe: Will the right hon. Lady give way?

Miss Widdecombe: No, I said clearly that I would not.
We must consider the opportunities—well, I shall give way after all, as I always enjoy the hon. Gentleman's interventions.

Mr. Hinchliffe: On her point about using the private sector, does the right hon. Lady accept that one of the major problems in the national health service relates to staffing levels—shortage of nurses? Will she reflect on where the private sector recruits its nurses?

Mrs. Alice Mahon: And who trains them.

Miss Widdecombe: The hon. Lady calls out from a sedentary position, "Who trains them?" The NHS does most of the training, but what develops, pays for and funds most drugs research from which the NHS benefits? The private sector. The fact is that we need a partnership—[Interruption.] Perhaps the Secretary of State needs a few facts.
The Government's contribution to the medical research budget, which probably comes from the Department for Education and Employment, is £350 million. Any single drugs company spends about £1 billion a year on research, and a lot of the results are not sold for profit because they do not come to fruition.
We have to consider the opportunities—

Mr. Hinchliffe: Will the right hon. Lady give way?

Miss Widdecombe: No, I have had enough—sit down.

Mr. Hinchliffe: Will the right hon. Lady give way?

Miss Widdecombe: No, what the hon. Gentleman said last time was not good enough—

Mr. Hinchliffe: The right hon. Lady has not answered.

Miss Widdecombe: It was not good enough last time, so it will not be good enough this time. The hon. Gentleman has to learn that it is no good shouting from a sedentary position when his Government are considered by the nurses to be one of the worst masters of the health service that they have ever had.

Mr. John Austin: Look behind you.

Miss Widdecombe: Why, are the nurses behind me?
We must consider the opportunities presented by the private sector. If we accept that our health service cannot do it all, we either resign ourselves to ever-increasing rationing—which is happening by stealth—or we look to increase the flows of additional new cash into our health service, through common-sense co-operation with the private sector.
That is not only about private insurance, and it is certainly not about patients paying for what they now receive free. It is about the massive investment in pharmaceuticals, research and clinical technology; the private finance initiative, which the Government resisted for so long, but now boast about, helping to fund our hospitals; and. co-operation—not Labour hostility—between our health service and private medicine.
That can be seen clearly in what the rest of the world spends on health care. Even if we ignore the American model, spending on the private sector in this country lags behind that of other developed countries. That disparity accounts for the much-quoted difference in gross domestic product spent on health. Such nations have recognised that total spending, not only public spending, is what matters.
The Conservative party is committed to year-on-year increases in public spending on health, but we also have the honesty to acknowledge, and the willingness to debate, the facts. I point out to the Secretary of State that, between 1990 and 1993, our percentage increases were greater than what he proposes. That did not solve all the problems of the health service, nor will his spending. However much more we put into the public sector, and we are committed to doing so, public spending has never done it all, is not doing it all and will never do it all.
Until we face that simple fact, and start the debate from that point and forget any possibility of magic wands—[Interruption.] I wish that the Secretary of State would look at me, just occasionally. He appears to be quite incapable of meeting my eyes when I am talking about such things. Indeed, this is a bit like a Wimbledon contest: he looks one way, then the other. He never manages to look at me when I am challenging him. He turns his face from me as he turns his face from the problems in our health service. He has been doing that ever since he took office. He has turned away from the real problems and cannot look them in the eyes.
Let me dispel a few myths. I do not believe, and I have never said, that anybody should be bludgeoned into using the private sector, but I have said consistently that nobody should be made to feel guilty for using it. We should consider the companies and trade unions that have supplied private health care for their employees and members, and the costs and the benefits in terms of health care overall—the totality of funding, public and private, devoted to making patients better. If we do not consider such opportunities and do not ask ourselves about radical new ways of providing for the ever-growing health care needs of our society, not only will this winter of crisis and chaos in our health service be the first of many, but, more important, the health service will become increasingly unsustainable.
I want a thriving health service with state-of-the-art technology, serving the people of this country well 50 years from now as it did 50 years ago. I am afraid that turning that into reality involves rather more courage, and rather more honesty, than the Government are currently prepared to show.

The Secretary of State for Health (Mr. Frank Dobson): I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:
reaffirms the historic principles of the NHS, that if people are ill or injured there will be a national health service there to help, and access to it will be based on need and need alone, not on ability to


pay or who their general practitioner happens to be or on where they live; welcomes the measures the Government has taken, is taking and will take that will ensure that comparable, top quality treatment and care are available in every part of the country through the introduction of new arrangements for spreading best practice, including the ending of the Conservative competition of the internal market, the introduction of local Health Improvement Programmes and Primary Care Groups to put local doctors, nurses and other health professionals in the driving seat in shaping local health care, the introduction of a new Commission for Health Improvement and National Institute for Clinical Excellence, and the creation of new legal duties of partnership and quality to ensure that all parts of the NHS and social services work together to deliver top quality services to all; welcomes the record £21 billion investment to be made in the NHS, including £18 billion for the NHS in England, over the next three years, notes the record 150,000 fall in NHS waiting lists since April 1998 and the 17 per cent increase in the number of new nurse trainees in the period since Labour came to power; and further welcomes the measures that the Government intends to take over the coming year to continue to build a modern and dependable NHS, including the extension of NHS Direct to cover 19 million people, the creation of 26 Health Action Zones covering 13 million people to target areas with particularly high levels of ill health—including cancer and heart disease—and reduce health inequalities, and the targeted investment of £30 million to modernise accident and emergency departments.
The right hon. Member for Maidstone and The Weald (Miss Widdecombe) called for a measured and mature debate. Her contribution was to mature debate what Les Dawson's jokes were to political correctness. She talked a lot about rationing, and likes to talk about it, but if "rationing" means merely that there is not an unlimited supply of something, it applies to practically everything in the world.
It is no more informative, mature or considered to talk about health care being rationed than to say that education is rationed because there is not an unlimited supply of classrooms or teachers, or that air travel is rationed because there is not a seat left on the plane someone wants to catch.
Those who want to make great political capital out of the rationing accusation are, by sleight of hand, trying to suggest that something quite different is going on—that each patient is permitted only a fixed ration of health care or a fixed number of operations or drugs, regardless of his or her circumstances. That may apply to some people with private health insurance, and it does, but in the national health service that sort of rationing is not happening, and it never has. In the NHS, treatment is according to individual need, not pre-ordained entitlement.
Why, then, do some patients get new treatments and others not? The very process of innovation means that some places will develop new treatments faster than others, while others will be quicker to follow. That product life cycle is as natural in health care as it is in every other sector. In 1940, penicillin was tried out on mice; within a decade, it had saved millions of lives. At one time, only a few dozen patients had access to hip replacements; they were available only in Wigan and Norwich, where they had been developed. Now hip replacements- are commonplace.
At one time, the only place in the world where it was possible to have a test-tube baby was Oldham general hospital. Now it is possible in every developed country in the world, but not in every part of this country.. Take an even newer technology—cochlear implants—to help deaf people to hear. Thresholds for treatment are coming down as costs fall and as evidence of cost-effectiveness for a

wider range of patients becomes available, but there is an eightfold difference in the uptake of this technology between different parts of the NHS in different parts of the country.

Dr. Peter Brand: Does the Secretary of State accept that, in the past, rationing as he is describing it—for the individual—occurred mainly because of the uneven availability of expertise and expected outcomes, whereas today rationing, as I see it, is determined by the availability of resources for people with the expertise to carry out procedures that we know have an effective outcome? There is financial rationing, rather than rationing of ability.

Mr. Dobson: I certainly do not entirely agree with that point, because in many cases there is the question of the necessary spread of expertise. For instance, any old doctor cannot carry out a cochlear implant, so we need doctors with the necessary skills before expertise can be spread as widely, effectively and quickly as we should like.

Miss Julie Kirkbride: I thank the Secretary of State for giving way on that point. A constituent of mine is in the early stages of multiple sclerosis and, as the Secretary of State knows, treatment for multiple sclerosis with beta-interferon is carried out on a regional basis. In the west midlands, 47 patients who attend the same centre have been given beta-interferon for multiple sclerosis. On the same waiting list, with the same doctors, are a further 60 patients—sadly, including my constituent—who have been clinically assessed as needing that treatment, but who are not receiving beta-interferon because the region's health authorities cannot afford it. Will the right hon. Gentleman address that question, which follows up the point made a moment ago by the hon. Member for Isle of Wight (Dr. Brand)?

Mr. Dobson: I shall address that point, because the whole basis of my speech is to explain what we are doing to change the national health service so that we get away from the lottery system that we inherited from the previous Government.
The take-up rate of new treatments, such as Taxol, has been too slow and needs to be speeded up. That time lag is nothing new—it has always existed: there is no new crisis. This is all about how fast patients get extra and better treatments, not about cuts and reductions.
What is new is that the Government are doing something about the problem by putting in place a better-quality system that is better organised for assessing new developments and spreading their use. The speech that we have just heard from the right hon. Lady was the latest round in the endless efforts of the Tory right wing to decry and denigrate the national health service. The Tories have always opposed it. They voted against setting up a national health service, and since then the right wing of the Tory party has taken every opportunity it can to run it down and to suggest that the people of this country would be better off with a different system. The right hon. Lady was at it again today.
The national health service was based on the idea that the best health services should be available to all—the best for all: quality and equality. Despite the damaging reforms of the Tories, the NHS has delivered. Most people


in most parts of the country get a good service from the health service. That is why it is popular. It is the most popular health care system in the English-speaking world.
I believe that the NHS is also popular because the people of this country like the idea that it is fair, that it is there not just to look after them but to look after everybody without fear or favour, and that nobody will miss out because he or she cannot afford to pay. They like the idea that, under the NHS, people qualify for treatment because they need it, not because they can pay for it. The people of this country prefer to pay for health care through their taxes rather than pay each time they see the doctor or have a test or go into hospital. Unlike the Tories, the people of this country do not want to abandon that principle, and nor do we.
There is another good reason why our NHS is so popular. It is much more cost-effective and less wasteful than any other system. That relates back directly to the principles on which it was based. Systems in which patients have to pay each time they are treated put off people who cannot afford it. That is not the end of it; those systems cost a fortune to run. Every item must be separately logged so that it can be included in the bill, invoices have to be sent, payments collected and debts pursued. All that paperwork is very wasteful and costly. By not charging patients each time they are treated, our health service is both more fair and more cost-effective. Fairness and efficiency go together.
When the Tories talk about alternatives to the NHS—as they were today—they want to lumber the people of this country with health systems that are less fair, less efficient and more expensive. That is just what one would expect from the party that gave Britain the poll tax and privatised the railways.
No one can deny that the NHS could always do with more resources than it is getting. That has been true for the past 50 years, but it is equally true of every other health care system, which can always do with more. Replacing our system would not eliminate that problem: it would merely add unfairness and extra costs.
The question that every system must address is how to provide a reasonable level of resources for health care and ensure that the services are top quality and are shared out fairly. Unlike the previous Government, the new Labour Government are tackling those issues. From 1 April this year, we will be investing an extra £21 billion in the. NHS—£18 billion in England. We have already made a start on the biggest hospital building programme in the history of the NHS. Not a single private finance initiative hospital was started under the previous Government. Under Labour, work has already started on new hospitals at Dartford and Gravesham, Norfolk and Norwich, Carlisle, Durham, South. Manchester, Greenwich, Bromley, High Wycombe, Amersham, Sheffield, Rochdale, Halifax and Reading, and many more are to follow. Smaller schemes will replace unreliable plant and equipment.

Mr. John Horam: We started all those hospitals.

Mr. Dobson: I am getting some stick from the hon. Gentleman at the back. The last time I saw him was at the sod-cutting ceremony for the hospital that his area is getting.

Mr. Horam: rose—

Mr. Dobson: No, no.
Starting in April, one quarter of all accident and emergency departments are to be renewed, which will make them better for patients and safer for staff. Much more is to be invested in equipment to detect and treat cancer, partly using lottery money from the new opportunities fund. That investment will ensure that more and more people in every part of the country will have access to top-quality hospitals, plant and equipment. The Government are determined to end the health lottery that results in some people in some parts of the country not being treated as promptly or as well as people in other areas.
Poor people are ill more often than others and die sooner. When somebody's span of life is cut short by poverty, that is real rationing. The Tories never talk about that sort of rationing. By opening up greater inequalities in wealth, they opened up greater inequalities in health. We are determined to change all that as part of our commitment to reducing inequalities in health and in health care. That is why, with the support of the health care professions—doctors, nurses, midwives, therapists, laboratory scientists—we are starting to change the NHS for the better by making it easier for the professionals to do their jobs, and to do them as well as they want to do them.
The NHS that we inherited has little or no machinery for identifying best practice and spreading it. That is one reason for the problems over new drugs such as Taxol, beta-interferon and Aricept. We are establishing—with, I emphasise, the full support of the professions—the national institute for clinical excellence. Its chairman designate is Sir Michael Rawlins, professor of clinical pharmacology at the university of Newcastle and consultant at the Freeman hospital and the Royal Victoria infirmary, Newcastle. He is the former chairman of the Committee on Safety of Medicines. His appointment was publicly welcomed by the British Medical Association on the day that I announced it.
The job of NICE will be to appraise new treatments, new drugs and new medical devices, and to issue authoritative guidance to the professionals who wish to use them. That will give individual clinicians more help than they have ever had before when they have to make decisions about the treatment of individual patients. As a result, best practice should be spread much more quickly, and ineffective treatments discouraged. Standards should rise and the same top-quality treatment should be available in every part of the country. NICE will take responsibility for providing the best advice, but each doctor will retain responsibility for the treatment that he or she gives to each individual patient.

Dr. Evan Harris: I was interested to hear the details about NICE. Will it consider cost-effectiveness as part of its remit? That may not be unreasonable, because there are limited resources. If so, will it ensure that the Government are associated with advice which it gives to clinicians not to prescribe or treat in a certain way because of problems of cost and not of effectiveness, so that politicians take responsibility for the limitation of treatments because of limited resources?

Mr. Dobson: NICE will certainly consider the cost-effectiveness of alternative ways of treating a particular condition. I hope that everyone would agree that that is sensible.
We must take matters much further. Studies show that the number of people getting important operations, such as heart bypass operations, varies dramatically from one part of the country to another. People in poor neighbourhoods where heart disease is more prevalent are less likely to obtain operations than people living in more prosperous areas where there is less heart disease. People living near major hospitals are more likely to obtain heart operations than people living further away. That cannot be right, and it must be changed. We are therefore placing a duty on each health authority to draw up a health improvement programme to improve health and health care in its area—targeting special effort on the least healthy. For the same reason, NHS regions are to be given more authority to ensure that each and every part of their areas is properly served.
Following the Calman-Hine approach to cancer services—which, to their credit, the last Government introduced—this Government are introducing more national service frameworks, which will spell out how the NHS should deal with other conditions. They will cover the services and treatment that should be provided by primary care and community services, by local hospitals and, where appropriate, by specialist centres. Work is already under way on drawing up the framework for heart disease—led by Professor George Alberti, president of the Royal College of Physicians—and the framework for mental health, led by Professor Graham Thornicroft of the Maudsley hospital. A start has already been made on drawing up a national service framework for treatment and care of the elderly with the appointment of Professor lan Philp from the university of Sheffield as chairman. The next framework will cover diabetes. All that effort is being put into ensuring that services in every part of the country are provided to a universally high standard. That is what the public want, what the professionals want and what the Government are determined to deliver.
As well as launching those initiatives, we shall change the law to place on each NHS trust a duty to promote and deliver top-quality services. Believe it or not, Mr. Deputy Speaker, trusts have no such duty at present; nor have they a duty to work in partnership with the rest of the NHS. In recent times, they have had a duty to compete with one another. We are changing that as well. To help each trust to deliver, we are also appointing a commission for health improvement to carry out periodic inspections, and to give help and advice to those whose performance needs to be improved.
Our modernisation of the system involves new, improved methods of setting standards and spreading best practice, new duties for trusts to deliver those standards, and a national body to ensure that they do. Those are all sensible, practical measures, welcomed by the professions. The Tories failed to introduce them, because such an approach could not be reconciled with the competitive internal market that they introduced—a market that set doctor against doctor and hospital against hospital, and was wasting a fortune in paperwork. In contrast, our proposals for modernising and streamlining the arrangements for primary care will cut bureaucracy. At present, nearly 4,000 fundholding practices and health authorities must negotiate annual contracts with NHS trusts. From April there will be just 481 primary care

groups, which will be able to negotiate much longer-term arrangements. The result will be a massive drop in paperwork and bureaucracy.

Miss Widdecombe: The right hon. Gentleman said that the NHS was fair. He is now reading out a list of bureaucratic changes that he intends to make. Can he tell me what is fair about people being obliged to pay for treatment because they cannot receive it from the NHS—because the NHS simply cannot do it all? How will any of the measures that the right hon. Gentleman is describing address the fundamental problem that people are not receiving what they need from the NHS, and that for everyone who pays there is someone falling off the edge who cannot pay, and whom the right hon. Gentleman is letting down?

Mr. Dobson: I am sorry, but the right hon. Lady seems rather to have missed the point—something at which she is fairly smart. All the measures that I am describing are intended to ensure that the lottery system under which certain treatments and drugs are available in one part of the country but not in another is changed. That will enable us to get rid of the anomalies to which the right hon. Lady refers.
The boards of the primary care groups will involve not just local doctors but nurses, social services and lay people. I pay tribute to doctors and their representatives at the British Medical Association for agreeing to the change, which they have accepted because they believe that it is in the interests of their patients. If they did not believe that, they would not have accepted it.
All those changes should help to establish a much more comprehensive service in every part of the country, and generally raise the standard of treatment and care. That is because primary care groups provide incentives for all concerned to "level up" to the standards of the best. Considerable interest is being shown in the opportunity that we are providing for primary care groups to take more responsibilities, and to become primary care trusts. That shows that the changes we are making go with the grain of the more forward-thinking parts of the professions.
As well as changes in organisation, we have embarked on practical measures to improve service to the public in every part of the country. Perhaps the best example is NHS Direct. It is an entirely new service; it does not replace any existing services; it is new; it is additional; and it really works. We introduced NHS Direct in three pilot schemes in Newcastle, Preston and Milton Keynes. It is a nurse-led 24-hour helpline, which people can ring at any time of day or night. The nurses check what people say is wrong with them against protocols on a computer, and then reach professional decisions. Sometimes they call an emergency ambulance immediately; sometimes they make sure that people see their doctors; and, in many cases, they offer advice and reassurance. NHS Direct has been a brilliant success. It has already been extended to the west midlands, it will go on line in south-east London at the end of the month, and by April it should cover 20 million people. According to present plans, it should cover the whole country by next year. It is another practical measure to help patients and the NHS, and to provide a fairer and better spread of the service that the NHS provides.
Since we became the Government, there has been a large increase in the number of people turning to the NHS for treatment. The right hon. Member for Maidstone and


The Weald gave the impression that all those people were turning away and going to the private sector. More than 2.5 million more people are being treated this year than two years ago—just over 45,000 more people each week. That is why waiting lists fell by 150,000 between April and November last year.
All that is a result of a massive effort by the staff of the NHS—all the staff of the NHS. We inherited an NHS held back by a shortage of nurses and midwives, which was being made worse by the cuts that the last Government made in nurse training. If they had kept even to the level that prevailed at the time of the 1992 general election, 11,000 extra nurses would have been available to the NHS. We already have 2,500 extra people training as nurses, but it takes three years to train a nurse. We must try to attract back into nursing in the NHS some of the 140,000 qualified nurses who have left—and they have not left since we took office. That is why, unlike our Tory predecessors, we acknowledged to the pay review body that there was a shortage of nurses, which previous Governments had denied. We said that we believed that they should award high increases for the lower grades. I hope that that will mean a settlement that will help to retain the nurses whom we have, attract back some who have left, and persuade more young people to train as nurses.
Unlike the last Government, we are trying to introduce family-friendly employment policies, and have taken new measures to reduce the number of assaults on staff. Like the nurses themselves, we also want to change their pay and promotion structure. The present archaic grading system is rigid; it holds staff back. It needs to be changed to provide more flexibility and more opportunity for career progression. We want to sort out with the profession new ways of working that are good for staff as well as for patients. The same applies to hospital consultants. Contrary to the myth, most consultants work longer hours in the NHS than is strictly required by their contract. A small minority do not. The consultants want to renegotiate the contract; so do we, and we have started negotiating. We want a system that is better for both patients and doctors. I hope that we can get it. A modern NHS needs a modern pay system.
A modern NHS also needs a top-class information technology system. The Tory years in the NHS were littered with multi-million-pound scandals over computer systems that cost a fortune and never worked. We have launched a 10-year strategy, again with the support and welcome of the professions, to invest £750 million to provide the NHS with the IT system that it needs and deserves.
Subject to proper safeguards for confidentiality, we want an IT system where each patient's up-to-date, accurate health records are available at the touch of a button to his or her GP, to a district nurse, to a hospital or perhaps even on a laptop to a paramedic with an ambulance. That would save time and money and lead to much better and quicker treatment.
We want a system that can send test results from the laboratory to the hospital or GP in the blink of an eye. Up to now, all treatment has involved patients travelling to see the professional, or the professional travelling to see them—not any more. In some cases, people will get their scan done locally, while a specialist miles away can look at a screen and give immediate advice to the local doctor or nurse. All that will spread quicker and better practice.
There will be changes not just in relation to medical information. In future, we want people to be able to go to their GP and, from there, book an out-patient appointment if that is what the GP recommends. We are already carrying out some pilot schemes on booked admissions. The lessons will be learned and then the system will be extended nationally. It cannot be done overnight, but it can and will be done.
From next April, when the extra £21 billion starts to kick in, people will see an NHS that is getting better. It will not happen overnight, but it will happen—better-paid staff, new ways of working, new drugs, new treatments, new hospitals, new helplines, new accident and emergency departments, new booking systems, new quality standards, new screening systems, new strategies to reduce inequalities in health, new centres to give equal access to health care.
That will not mean that the resources for the NHS will be limitless. Priorities will still have to be set, but the quality of treatment and care will be raised and there will be a fairer, more standard share-out throughout the country. While the Tories yammer on about extending the private sector and about rationing, we will get on with the job of improving the health service.

Mr. Kenneth Clarke: I do not think that the Government will be referred to any longer as one of style rather than substance because their style has seemed in tatters since we got back from the Christmas recess. That is revealing failures of substance.
There are two substantial policy areas where the Government are already getting into an important mess. The first is macro-economic policy, of which we will hear more in the coming year. The second is the national health service, which, after less than two years of Labour administration, is already coming under much greater pressure and facing bigger difficulties than most people in the service can remember for a long time. As my right hon. Friend the Member for Maidstone and The Weald (Miss Widdecombe) has said, that is down to the folly of the Government and to the fact that they have wasted their first two years: they have lacked a proper policy and not faced up to what needs to be done.
The debate is short and my contribution must reflect that. I am happy to echo what my right hon. Friend the Member for Maidstone and The Weald said. Contrary to the sneering remarks of the Secretary of State for Health, the shadow Secretary of State happens to combine one of the more combative styles in the House with extremely intelligent content. She took what she described as a grown-up approach to the subject, which is what the public want us to do.
It simply will not do for the Secretary of State to reply by pretending that our criticisms are based on some secret desire to abolish the national health service. I am no more party to some sinister plot to that end with the hon. Member for Southwark, North and Bermondsey (Mr. Hughes) than is my right hon. Friend the Member for Maidstone and The Weald. The fact is that every party wishes to see a better national health service.
The difficulty is that the Labour party came to power with no policy to achieve that. It gave the impression that its election would lead to substantial improvement without more ado. The Secretary of State is desperately trying to find some belief that improvement will come.
The Secretary of State has to get rid of two legacies from Labour's period in opposition. I do not think that he was shadowing health when we came to the election, so it is not his fault that he inherited no files, no policies, no proposals—nothing—but he sticks to the slogans for lack of anything else.
The Secretary of State appeared to believe when he was elected, and he still sometimes implies, that all the problems of the national health service could be solved if only more money were spent. It was clearly the position of the Labour party that the problems that the health service faced before the election were all caused by lower spending than Labour would achieve.
That is total nonsense. We are not looking backwards, but the previous Government always gave higher priority to the NHS than to any other service, as every Government are bound to do. We increased public spending on the service by 1 per cent. of gross domestic product during our period of office. The Labour Government will do that only if they flatten GDP in the next few years.
The Labour party followed up the clear impression that it gave that it was going to spend much more on the service to get it out of trouble with a peculiar approach to public spending in its first two years in office. It thought that it could blame us for the two-year squeeze to which the service has been subjected. It claims that it followed the public spending plans of its predecessors: it did not. It knows that, after the previous Government published each year's public spending plans, they never, in practice, stuck to the first figures that they pencilled in for years two and three of every three-year survey.
Under the previous Government, the public spending round always enhanced spending on the NHS—above what we had first proposed. It is water under the bridge now, but 18 months ago, Conservatives and Liberal Democrats were telling the Labour Government that they would hit a crisis if they pretended to believe that they were simply spending what their predecessors would have spent. They did not even do that.
The Secretary of State sometimes points out that, in the end, the Government put in some extra money for winter pressures last year and so on, but the result was an increase in public spending that was pathetic compared with the expansion of previous years. One of the reasons why we are having a difficult winter, in a year when flu and other epidemics are not exceptional compared with other difficult years, is the fact that the health service has been subjected to a severe squeeze by the present Government in their first two years in office.
Now the Government have committed themselves—again inflexibly—to three years of increases in public expenditure that are not out of line with those that were afforded by the previous Government and that, as my right hon. Friend the Member for Maidstone and The Weald rightly said, are not as good as the best three years that we can point to in the 1990s.

Mr. Heppell: Will the right hon. and learned Gentleman give way?

Mr. Clarke: I will give way just once in my short speech.

Mr. Heppell: From the tone and content of the right hon. and learned Gentleman's speech, it seems that he is

suggesting that the Government are not spending enough on health. How does that tie in with the remarks of Conservative Members in the Opposition Treasury Front-Bench team, who say that our spending plans are extravagant?

Mr. Clarke: I joined that debate and I never heard any Conservative Member say that we are spending too much on the NHS. I have joined attacks on the Treasury for the overall level of public spending plans because the Treasury has combined its desirable spending plans on health and education, where what it is achieving is not out of line with what we have achieved, with its failure to apply any strict priorities to other public spending, in line with economic reality. On health, the Government are getting back on track with the kind of increases in public spending that have become almost the norm, on average, for most of the years of the modern NHS.
I will not repeat—the point has been made well in the past week or two—the fact that the other damaging slogan that the Secretary of State stuck to was the ridiculous thing about the number of people on waiting lists. I tire of remembering the number of times that successive Conservative Secretaries of State pointed out to our opponents how fatuous it was to look at the number of people on waiting lists, as opposed to the length of time that people waited for serious treatment.
Not only did Labour use that as a litany in opposition, but it has stuck to it in office. It has distorted the activity of the health service. If we set perverse targets for those responsible for allocating resources, so that they have to speed up treatment of people with comparatively minor ailments when they are under great pressures of rising demand, the health service is that much less well able to deal with winter pressures. That is plainly one of the things that has happened.
The Secretary of State has to come back with the sort of defence that I have heard Secretaries of State use in the past: he says that, each week, 45,000 more people are being treated now than two years ago. We have had 18 years of Secretaries of State saying that—I should hope that they have been saying it.
Demand for national health service treatments is rising rapidly because of an aging population and advancing medical science. The previous Government put more money into the NHS, and the current Government are getting back on track in continuing the increases. If the current Government had not increased the number of patients being treated each week, they would have fallen far short of everything achieved by the previous Government. However, they are distorting priorities by focusing on waiting numbers, as opposed to the local priorities that would have been chosen by health authorities, GPs and trusts.

Mr. Dobson: The right hon. and learned Gentleman has dwelt lovingly on the legacy that we inherited. Will he confirm that, until the NHS reforms that he introduced as Secretary of State for Health were implemented, NHS waiting lists had never risen above 1 million and that, since they were implemented, lists have never been below 1 million?

Mr. Clarke: The idea that my reforms to the NHS caused a sudden increase in referrals is an interesting one.


The numbers of people on waiting lists demonstrates the increasing age of the population and advances in the treatments available to the population. It demonstrates also the very varying referral patterns of individual general practitioners, some of whom are far more likely to refer than others. Some consultants are far more likely than others to receive patients.
The numbers on waiting lists are a measure of demand, but they are not a significant one. In the next year or two, numbers may go up or down, and it will have nothing to do with the Secretary of State or with the Government. It is silly to choose numbers as a measure. However, treatment priority and the length of time for which people wait is a very important measure, which we shall be examining.

Dr. Harris: Will the right hon. and learned Gentleman give way?

Mr. Clarke: I said that I would not give way, as I should otherwise speak for far too long.
I shall not engage in great debate with the Secretary of State on NHS reforms—as he has created the tremendous myth that he is abolishing them. Everyone in the NHS knows perfectly well that he is not abolishing the reforms—and breathing a great sigh of relief that he is not.
The previous Government never called the reforms an "internal market". In his speech, the Secretary of State was merely repeating the general election slogans—although he is now two years into responsibility for government—when he talked about "the Government getting rid of competition; being in favour of co-operation; sweeping away the internal market" and all that nonsense. Although he no longer says that simply reducing the costs of bureaucracy will reduce the numbers of people waiting for treatment, all the other slogans have been reproduced.
The Secretary of State is retaining from our reforms what, in the jargon, is called "the purchaser-provider divide". He is therefore retaining a means of dividing providers and those who decide on behalf of the public what treatments should be provided. Unfortunately, he is also inhibiting the providers' choice of where and how service is provided. However, he is retaining the essential elements of choice.
The Secretary of State is retaining—it sounds like he might even make greater use of it—the practice of clinical audit and many other features of our reforms. One of the best boasts that he can make is about the new hospitals that will be opening. He is able to make that boast because he stuck with the private finance initiative, which was denounced by his predecessor as health spokesman when Labour was in opposition. The Secretary of State is now taking credit for new hospitals being produced by implementing a policy that his colleagues fought like mad when they were in opposition. I appreciate why that point should make him raise his eyebrows above his beard, which is much better than mine. Nevertheless, I am grateful for that policy U-turn—he will have to make others.
Rationing is relevant to whether reforms are being made in the NHS, and the public could not care less whether they are Labour reforms or Conservative reforms.

The public want a system that functions fairly in response to the ever-changing demands made on it by a modern society.
As my right hon. Friend the Member for Maidstone and The Weald rightly said, rationing exists in every health care system in the world, and is more usually described as a way of making difficult choices, deciding priorities and allocating resources so that they have the greatest effect. The health service must aim to meet every need, but it will never meet every demand, and no health service can. It will help people to understand the difficulty of the term "rationing" if we make it clear that we are talking about how to match finite resources with infinite demand, to ensure that the most important needs are satisfied. Currently, many important needs are going unsatisfied, as our constituents and the press tell us daily.
The Secretary of State is making the big mistake of replacing some of the autonomy given to individual practices and trusts by—as hon. Members have already said—a raft of commissions and advisory bodies and the great committee structure of primary care groups. The nomenclature does not matter, as the groups may boldly go on to be known as primary care trusts and to have even more responsibility. The Government are introducing bureaucracy into a system that needed further improvement; the improvement that was needed was to give individual practices even more control over the resources at their disposal to meet the needs of their patients, allowing greater local autonomy to prevail.
The Government have swept away fundholding, simply because they opposed it. They had the slogan of opposition to a two-tier system. I shall simply cite the survey of health authorities and trusts, conducted last year by the National Association of Fundholding Practices, delivering their verdict on fundholding being swept away. The survey asked whether authorities and trusts believed that practice-based budgets should continue, to which 72 per cent. said yes and 21 per cent. said no. It asked whether they believed that fundholders had made improvements to services, to which 88 per cent. said yes and 2 per cent. said no. It asked whether the actions of fundholders have resulted in improvements for all patients, to which 53 per cent. said yes and 37 per cent. said no. It asked whether authorities found it easier to create change with fundholders or non-fundholders, to which 51 per cent. said that it was easier with fundholders and only 2 per cent. said that it was easier with non-fundholders.
Fundholders have been swept away by dogma, replaced by committees which I hope will work. I do not want the system to grind to a halt in my constituency or anywhere else. However, it is folly to think that committees of 33-odd people—comprising doctors, nurses and laymen but excluding other professions—can reach agreement on an enormous budget, for a locality in which many GPs will wish not to become involved and in which there will be huge disagreements between committee members. The plan will cause rigidity in the system. Our reforms needed to evolve and to be improved, and the commissioning and purchasing side of the system had to be strengthened, providing more power to the elbow of individual GPs.

Miss Kirkbride: Will my right hon. and learned Friend give way?

Mr. Clarke: I am sorry that I cannot give way to my hon. Friend, with whom I am sure I agree. I should like to deal with one point that she dealt with—the matter of beta-interferon and multiple sclerosi.
The Secretary of State already has too many central initiatives. He is slipping back into initiatives for this and that, holding back too much money and trying to run the service by press release rather than by giving greater control to GPs and the NHS. However, he is running away entirely from some difficult issues, which are matters not of local priorities but of clinical opinion.
Such a matter is whether beta-interferon is effective and cost-effective in the treatment of multiple sclerosis. On that, the Secretary of State has said that people should get the treatment if their consultant advises receiving it, while ignoring the fact that in no part of the country does that rule prevail. In my constituency, just as in Bromsgrove, some patients receive it when their consultant recommends it, but others do not because the allocated budget is not large enough.
I have a letter from the chief medical officer saying that the treatment is not satisfactory, that improvements to the quality of life are not sustained, and that more work has to be done. The leading consultant neurologist in my part of the world does not believe that. He believes that published material now shows that the quality of life of patients can be improved. Local spending priorities cannot determine that clinical matter.
We cannot have people saying that we believe one set of clinical advice in Preston, but not in Nottingham. Clear professional guidance from the centre is required. This is a difficult matter that presents hard choices. No rulings have been made on the matter, and the Secretary of State has been only too content to leave it to local health authorities, for them to wrestle with their budgets and to contend with the lobbies. It is an unsatisfactory situation. I do not think that any of the Secretary of State's proposals on the problem will ease it or the many other problems like it in the NHS across the United Kingdom.
I urge the Secretary of State to accept, after two years, that he is no longer in opposition, that it is inadequate to continue to fight the previous general election, and that most of the slogans used in the election were silly and were produced by people who had done little to prepare themselves to meet the demands of the national health service. The slogans are quite valueless when applied to the problems faced by the NHS in the first difficult winter under this Government.
The amounts of money that the Secretary of State will provide will be more satisfactory from next April onwards, and more in line with the increases made by the previous Government in the early 1990s. I do not have any confidence that he has the first idea of how to apply sums intelligently. He is responding to pressures, repeating political slogans and facing each headline and winter as they come along, trying to do the best with what he has, to persuade everyone that the service is getting better. The NHS requires clearer policy than that. My right hon. Friend the Member for Maidstone and The Weald is to be commended on urging him to produce one, to give some serious thought to the problem and to stop thrashing about, as he has been doing, putting the NHS into crisis.

Mr. David Hinchliffe: The right hon. and learned Member for Rushcliffe (Mr. Clarke) began by saying that the flu problems that the NHS has faced in

recent weeks were not exceptional. That may be true in his part of the country, but in the north-west of England and in Yorkshire we have had some serious difficulties. I did not realise how bad things were—despite my entire constituency office staff of three people going down with the bug—until I saw my local newspaper for the first week of January. Reports of deaths normally occupy two or three columns, but for that week they stretched to two full pages. That shows the severity of the crisis that the NHS has faced. My neighbour, who is a nurse in the local hospital, told me that on her ward—one ward alone—10 people were absent. One of those was on maternity leave, but the rest were down with flu. We should not underestimate how serious the problem has been.
Today's debate is on an Opposition motion. I believe in the importance of constructive opposition in a democracy. I have the privilege of chairing the Health Committee, in which some excellent Opposition Members play a constructive role. In the past three weeks, the Opposition, led by the right hon. Member for Maidstone and The Weald (Miss Widdecombe) and her colleagues, have been opportunistic and destructive. Her comments today about bodies placed in refrigerated lorries—

Mr. Philip Hammond: It is true.

Mr. Hinchliffe: It may be true, but what do health managers do when faced with the scenario that I have described, with so many deaths that the reports cover two full pages in my local newspaper? What do they do when people are dying and there is no way of dealing with it? I praise NHS staff for the work that they have done in recent weeks in my area and elsewhere, despite the negative comments that we have heard from the Opposition today and throughout the Christmas and new year period.
The right hon. and learned Member for Rushcliffe talked about the intelligent content of his colleague's comments from the Opposition Front Bench. I must have blinked, because I did not notice any intelligent comments. I have listened carefully to the Opposition's policies and arguments since the election. In debates and at endless Question Times we have heard attack after attack from the Opposition Front Bench on the Government's failure to meet their waiting list target. When the Government start to meet their waiting list target, all of a sudden the Opposition shift their tack and say that the crisis in the NHS over Christmas is the fault of the waiting list initiative. I am sorry, but we made an electoral pledge, rightly or wrongly. The people to whom I made that pledge have a right to evaluate whether we are meeting it. I am pleased that the Government are doing so—and doing so well.
What would the Conservatives have done? I have listened carefully to what the right hon. and learned Member for Rushcliffe believes to be the constructive comments from the Opposition Front Bench. The only proposal that we have heard from the right hon. Member for Maidstone and The Weald is to put people into the private sector. That is the only answer that the Tories have to the current problems in the NHS.
I asked the right hon. Lady a relevant question. I acknowledge that we have staffing problems in the NHS. I have done the rounds with other colleagues on the Select


Committee, meeting nursing staff, doctors, ancillary workers and others employed by the NHS to find out their thoughts on the current staffing level problems. One thing has come over loud and clear: we are short of nurses. Many wards are desperately short of nurses. One reason for that is that many nurses have gone to the private sector. The right hon. Lady's answer to the problems of the NHS—the crisis, as some are calling it—is to get people into the private sector. The increased demand in the private sector will draw ever more nursing staff and doctors from the NHS. What nonsense. Is that the best that she can do after 18 or 19 months in opposition? It is disgraceful.
The Select Committee will soon be reporting on the regulation of the private sector. In the evidence that we have taken so far from people in the private sector and outside, we have heard serious concerns about the quality of care that it provides. The right hon. Lady might want to reflect on why the quality of care in the private sector is so much worse than that in the NHS.

Miss Widdecombe: I am on record as having said for some time that the private sector should be regulated. If it is to play an expanded role, it must be regulated. I have called on the Secretary of State to consider that, because those in the private sector tell me that when they raise the issue with him, he will not meet them because he says that he has nothing to do with the private sector.

Mr. Dobson: They are liars.

Mr. Hinchliffe: My right hon. Friend the Secretary of State and I have many things in common. We use the same pork pie shop in Yorkshire, as may be apparent. I support him ideologically in many ways because he believes in the NHS and its ethos, as I do. The right hon. Lady did not respond to my intervention—[Interruption.] She intervenes on me, then talks to her colleagues when I am responding. I wanted to know her response to my important point about her key policy initiative of moving people into the private sector. What would the impact be on nursing staff levels in the NHS?

Miss Widdecombe: I was talking with my colleagues because we thought—we may have been mistaken—that we heard the Secretary of State call those in the private sector liars. If he did, I am sure that those concerned will be interested to read that.
The hon. Gentleman has so vastly misunderstood my policy that I cannot put him right in the space of an intervention. A nurse is trained to nurse. Is it less valid for her to assist someone who happens to have paid for their operation than to assist someone who has not?

Mr. Hinchliffe: This is the third time that I have put my point to the right hon. Lady, but she has not responded. My central point is that if she wants to push people into the private sector, she must accept that nursing and medical staff in the private sector will come from the national health service. She would worsen the circumstances of people in the national health service. That is her policy and it is disgraceful.

Dr. Harris: rose—

Mr. Hinchliffe: I have given way several times. I want to carry on because there are others who want to speak.
The right hon. Lady's other policy, presumably, is to return to the anarchy of the internal market. The right hon. and learned Member for Rushcliffe plays down the anarchy of the internal market. [Interruption.]

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I appeal to the right hon. Member for Maidstone and The Weald (Miss Widdecombe), who has already made a significant contribution to the debate.

Mr. Hinchliffe: The right hon. Lady wants to return to the competitive, cut-throat environment of hospital versus hospital and doctor versus doctor. I am proud that the Government are abolishing the internal market and getting back to basics in the NHS.
I commend the Government on a range of initiatives. My right hon. Friend the Secretary of State can be proud of the impact that the investment that he has managed to win for the NHS is having in areas such as mine and the contribution that it has made to easing the serious problems that we have faced over the past few weeks. However, I am sure that he agrees that money is not the only issue. No one has said that it is just about money. How the money is used is important.
I have taken a close interest in the NHS over many years. I was concerned about the gross waste of scarce resources caused by the internal market. The Government are getting back to investing money in patient care. I welcome the abolition of the internal market, the way in which the Government are putting the fragments back together and the new statutory duty of partnership that the new Bill will introduce when it comes before us in the next few months.
I welcome the way in which the Government have launched the winter pressure initiative. Members of the Select Committee have seen excellent examples in various parts of the country of people working together to address the difficulties in the NHS and social services, and numerous positive initiatives have alleviated the acute difficulties that have faced the NHS in recent weeks.
I want to address one or two areas where positive developments are needed within the NHS under the new Labour Government. Recent experience has shown that, as a matter of urgency, we must address staffing levels because, at ward level, there is simply no slack in the system. If—as in the case in which my neighbour was involved—a ward has 10 people away for various reasons, there will be serious difficulties. We must build some slack into the system.
We must look at how we ensure that nurses are attracted back to the NHS. It is partly about pay, but it is not just pay—as my right hon. Friend the Secretary of State has recognised. A range of issues concern nursing and NHS staff over and above pay, and I hope that the Government will address those in the next few weeks and months.
I would like to see substantial changes in primary care. In my part of the world, constituents have attempted to contact their GPs over the Christmas and new year period. Obviously, the GP surgeries have not been working and people have had difficulty accessing advice and help. I recognise that NHS Direct will make a substantial contribution to solving those difficulties. However, it concerned me that many of those who have tried to get hold of the deputising services in my part of the world


have been told that there would be a five or six-hour wait for the service. They have, therefore, presented themselves to accident and emergency units, causing great stress in the hospital sector—stress that could be resolved by more flexible primary care arrangements.
My hon. Friend the Member for Dartford (Dr. Stoate)—a GP—is looking at me and I know that he works hard, as do many GPs who deserve their holidays. However, it is possible, with the provision of primary care groups, to ensure that we create different arrangements over holiday periods so that people can access GPs to get a basic prescription and do not need to present themselves to accident and emergency units.
It will not surprise Ministers that I want to raise my concerns about the need for further improvements in the relationship between the NHS and social services. The Select Committee produced a report last week which may or may not meet with the approval of Ministers—but I hope that they will listen to some of the points that the Committee picked up.
One key area, with direct relevance to the kind of problems that we faced over Christmas, is the way in which one element of local authority or health services does not recognise the impact of expenditure on another element, so that additional money spent in one sector can impact on saving more money in another sector. I welcome the way in which the Government are moving towards pooled budgets, but they should look seriously at the way in which charges for domiciliary care and care in the community are preventing people from releasing and making available acute beds. That factor must be analysed in detail by the Department of Health.
The picture that we on the Select Committee get, and that I get personally, is that there are tremendous experiences of joint working across the country. Staff want to work together, but—in many areas—are prevented from doing so by the current statutory framework.
In conclusion, I recognise that we have made great progress, and I do not recognise the picture presented by the Opposition. There are many achievements of which the Government can be proud in the short time that we have been in power. We can debate rationing, waiting lists and waiting times—the shorthand for what is happening in the NHS—until the cows come home. However, the key issues of health—morbidity, illness and mortality—are not even mentioned in either the Tory motion or the Liberal Democrat amendment.
I am pleased that the Government are addressing fundamental public health questions of the kind to which my right hon. Friend the Secretary of State referred—such as why poorer people are often more ill than others. The Government are doing something about that, and they can be proud of their policies and their results. I wish the Government well in their future initiatives.

Mr. Simon Hughes: This debate was triggered when, at the last Health Question Time before Christmas, the Minister for Public Health came up with the unequivocal statement—as the right hon. Member for Maidstone and The Weald (Miss Widdecombe) said in her introductory speech—that there was no rationing in the NHS.
The hon. Member for Wakefield (Mr. Hinchliffe), the Chairman of the Select Committee on Health, has just said that there are other hugely important issues, especially concerning the quality of care. However, today we have, quite rightly in our view, taken one of the issues that has underlain the health service throughout its existence, as the right hon. and learned Member for Rushcliffe (Mr. Clarke) stated. We are trying to tease out of the Government, and the Secretary of State, the admission which everybody outside knows is true—namely, that there is rationing, and that it is nothing to be ashamed of. Only if we get past our initial hesitation at using the "R" word can we have an honest debate.
The Minister for Public Health is in her place. She, together with the Secretary of State and her ministerial colleagues, must accept that it is no good coming to the House with an amendment to a Conservative motion that does not deal with the point of the motion—nor with the amendment that my party tabled, which accepts the proposition in the motion.
From the moment that the Government came to office, and during the whole 18 years of the previous Administration, it has been understood that one of the biggest and growing issues in the NHS has been how, as the right hon. and learned Member for Rushcliffe said, we reconcile growing needs with the resources that might be available at any one time.
We have very little difference on the general thrust of the Conservative motion, as the right hon. Member for Maidstone and The Weald said, but we do have four detailed points of difference. The right hon. Lady has heard me say before that I always welcome conversions, and we observe the fact that Tory Front Benchers have converted—they are now owning up to the fact that there is rationing, something the previous Conservative Administration never did. I appeared with the right hon. Member for Charnwood (Mr. Dorrell), her predecessor as Opposition spokesman, when he was Secretary of State for Health, in television studios before the last election—together with the then Labour spokesman, the right hon. Member for Islington, South and Finsbury (Mr. Smith). Never did the word "rationing" pass their lips. The Conservative conversion is welcome.
We do not want to be overly critical of the national institute for clinical excellence and the commission for health improvement, the bodies that the Government are proposing—which we will debate, no doubt, in the health Bill later this year. However, we certainly do not think that, suddenly, they will be the answer. Unless, once they have formed a view, they are given the power to impose that view, all they will do is give advice, recommendations and suggestions—the rationing decisions will still be left to the practitioners. Do they use a drug costing £1,000, or not? Do they treat seven people, or one? Do they carry out this or that practice, or not? We have not heard from the Government whether they will make the NICE recommendations compulsory. If they do, the Government could then accept the ownership of the decisions, which would be much fairer on the practitioners—the people in the front line, or, as people always describe them, the gateway to the NHS.

Mr. Clive Efford: The right hon. Member for Maidstone and The Weald (Miss Widdecombe) gave the example of a number of people who purchase expensive drugs for themselves because they are not available to


them through the NHS. Does the hon. Gentleman accept that rationing will inevitably lead to two classes of patient in this country—those who can afford to buy drugs in the private sector and those who cannot? Does he accept that rationing will mean that people cannot access services? Does he accept that the fact that implicit rationing is occurring in certain areas does not absolve the Conservative party of the responsibility for bringing us to this situation?

Mr. Hughes: I would happily spend a lot of time criticising the previous Administration, but it is not productive—the Labour party is in government, and constructive opposition is about trying to make the Government do what is right.

Mr. Efford: Answer the question.

Mr. Hughes: I can easily answer the question. There is a huge amount of rationing now. The former Minister of State—now the Chief Secretary to the Treasury, the right hon. Member for Darlington (Mr. Milburn), who was recently promoted to the Cabinet—effectively admitted that in the autumn, when he said that one of the objectives of the Government was to make sure that, in future, someone in one part of the country would not have a request for treatment turned down which would be granted in another part of the country.
Rationing by postcode is general in many areas of life. My mother, who lives in Hereford, told me a few years ago that she was told by someone at the local eye hospital that she would have to wait for a year or a year and a half for a simple cataract operation, with the prospect of deteriorating eyesight. The same person told her that if she was willing to pay she could have the operation tomorrow. There is a two-tier health service: the 13 per cent. with private health care can generally buy their care tomorrow.
When, in the past, my hon. Friend the Member for Isle of Wight (Dr. Brand), a general practitioner, was an outside adviser on health to our party, we argued that we could end the two-tier health service only by working out what it was necessary to make the NHS do everywhere in order to give everyone the same access to treatment.

Dr. Brand: This morning, I met two simple examples of rationing. A man who had very imperfect cosmetic surgery carried out on the NHS now has to wait 14 months before seeing a consultant about a revision operation. That is rationing—the man, who is on benefit, cannot go to work until that work has been carried out, so he has to go privately.
I saw a man of 62 who desperately needs Viagra—as does his wife. I have been told that I am not allowed to prescribe it under the NHS, so I broke my terms and conditions of service this morning by issuing a private prescription, to save him the expense of having to see another doctor privately for exactly the same service.
Those are clear examples of rationing and of a lack of guidance to the poor sods such as myself who have to meet not the demands, but the needs of patients.

Mr. Hughes: In our previous NHS debate just last week, the Secretary of State called my hon. Friend an hon. and learned colleague, because he is a general

practitioner. I hope that Ministers will learn the lesson that he teaches today. I hope that next week, if not this week, Ministers will acknowledge the self-evident truth that there is rationing in the health service, just as the Secretary of State earlier acknowledged the self-evident truth that there was a crisis and a staff shortage in the health service. Then, we could get on with the debate.

Mr. Efford: Will the hon. Gentleman give way?

Mr. Hughes: No; I have already given way once to the hon. Gentleman.

Mr. Dobson: Under his definition of rationing, can the hon. Gentleman name anything that anyone wants that is not rationed?

Mr. Hughes: The Secretary of State drew a comparison with education, which he said was rationed, but the reality is that, for those of school age who require education, it is not rationed. Schools and classes are available, so the situation is completely different.

Mr. Dawson: Will the hon. Gentleman give way?

Mr. Hughes: No, I am dealing with the Secretary of State's point.
The reality is that the positions in health and in education are not comparable. At the moment, the patient to whom my hon. Friend the Member for Isle of Wight referred could not get the treatment he needed, just as my mother could not. I have constituents with multiple sclerosis who cannot get treatment. That is rationing. It is not the same in other walks of life. There is a difference between what one needs—to be cured, so as to be able to get back to work and pay taxes, thus contributing rather than drawing from the state—and what might be desirable extras.
The rather academic and cautious beginning to the Secretary of State's speech did not draw the right parallels. We are talking about treatments that the national health services acknowledges people need for their good health, but that are not available at all, are available only after a year or two or three, or are available in place A but not in place B.

Dr. Harris: The Government take the limited view that either there is no rationing at all or everything in the world is rationed. The British Medical Association, the King's Fund, the health economics departments at York and Birmingham, the Patients. Association and every political party other than the Labour party recognise the truth—the Government are sticking to their point in splendid isolation.

Mr. Hughes: That is true. I challenge the Secretary of State to do what I did this morning: I went to my filing cabinet and, looking back only two years, I turned up cutting after cutting from professional bodies and reputable journalists making the case about rationing.
In 1996, the BMA held debates entitled "Hard Choices in Health Care" and "Rationing and Rights in Health Care". The latter was initiated by the Institute for Public Policy Research, a think tank that the Government recognise as valid. In March 1998, The Daily Telegraph said:
Test-tube baby choice depends on your postcode.


The Independent said:
MS sufferers denied costly 'wonder drug' … People with MS still face a postcode lottery on new treatments. The situation is unfair and unacceptable.
Chris Ham, a very well-known health expert, wrote about the case of child B and said that the issues involved were oversimplified.
Every health journal, almost every month, provides an example. Viagra was the most controversial and topical instance last year. A couple of months ago, my hon. Friend the Member for Richmond Park (Dr. Tonge) introduced a debate about audiology services in the health service, which are unavailable in some places. They are not high-profile services, but for the deaf or hard of hearing they matter a great deal. Everyone outside the House is calling on us to face up to the issue and do something about it.
Clearly, there is and always has been rationing. There are many relevant examples showing rationing by delay, by cost—through prescription or other charges—or by unavailability, as with in-vitro fertilisation or treatment for MS sufferers. No amount of clinical effectiveness institutes, health improvement commissions or primary care groups will alter that fact. Indeed, the primary care groups are worried that, in the future, they will have to carry the burden of the decisions on rationing.
The King's Fund, a very reputable organisation, published a report using figures from the British social attitudes survey, which showed that in 1983, 29 per cent. of people supported limiting the NHS to people on low incomes while 64 per cent. opposed it, but that by 1996 the number of people supporting a safety-net-only service had gone down. Most people want a comprehensive health service and they want the Government to face up to questions about what should be included in it and how it should be funded.

Mr. Bercow: The hon. Gentleman justifiably invokes public opinion. Is he aware that the King's Fund and the relevant economist at the York university centre for health economics calculate not only that primary care groups will probably be ineffective, but that they will cost £150 million?

Mr. Hughes: I am being tempted away from the issue of rationing. To replace the present structure with primary care groups certainly will not have a nil cost and they will have their own bureaucracy. There will always be a management cost for the health service, but I do not want to get into the debate about whether the present structure is better than what the Government intend to implement. I want rather to concentrate on the fact that we must get over the hurdle, or blockage, in the Government's mind that is preventing us from taking a long-term view.
The Government have admitted that the NHS is in crisis, but we are not being truthful about the whole story until we accept the other half of the equation. Just as health service pay is rationed—it will be rationed by the present Government, as it has been by every previous Government and will be by every future Government—so drugs and treatment are rationed. There is an equation between the money that goes into the kitty and the service that can be delivered.
I was not surprised by a briefing from the BMA for this debate that I received on Friday. It was blunt about the hard choice that the House and the Government will have to face. It said:
The Government face two options…if the public and politicians want a comprehensive health service, with everything available on the NHS, the Government must provide considerably more resources to the NHS, over and above the Comprehensive Spending Review Allocation.
The right hon. and learned Member for Rushcliffe used to be Health Secretary and what he said was absolutely right. We have done the figures: the amount of money that his Government devoted to the NHS always went up, and the Conservatives always provided more than predicted in the spending plans. As a result, this Government's announcement of an extra £21 billion will mean that only £1 billion extra a year will be available, compared with the final spending plans drawn up by the previous Administration.

Mr. Hinchliffe: What would you do?

Mr. Hughes: The Government must respond to the public demand for a debate about what the NHS should do. They must not act in a way that no doctor ever would in response to a patient: they must not say, "I see you're ill, oh health service. I'm terribly sorry, but I'll come back in two years with a remedy. I won't do anything for the time being because some inherited rule says we can't treat the problem immediately."
The right hon. Member for Maidstone and The Weald was right in her identification of the great problem which has been compounded by the Government. They came- to office promising to save the NHS in 14 days—that looked a bit optimistic even to the most naive people—but then they phased the first pay award, which had a wonderful effect on morale. People left the health service because of this Government's actions; that did not happen only under the previous Administration.
Moreover, the Government inherited the Tories' spending plans and kept to them for two years.

Mr. Hinchliffe: Will the hon. Gentleman give way?

Mr. Hughes: Let me finish the point. There was a bit of extra money—

Mr. Dobson: Twice as much as you promised.

Mr. Hughes: Not twice as much as that, which in any case was considerably more than the Government had suggested would be provided. The Government kept to the Tory spending plans until last July, and now have provided just about enough money, for the final three years of the Parliament, to allow the NHS to keep its head above water.
The Cabinet will study the pay review body's report in 10 days' or two weeks' time. I suspect that the decision will be made behind closed doors and will not be brought to Parliament for endorsement. Even if the Cabinet do not phase the award—

Mr. Dobson: There are no Liberals in the Cabinet.

Mr. Hughes: No, that is true, and the Government might face a really hard time if there were.
When the Cabinet studies the review, I hope that it will not do what the Tories sometimes did on similar occasions. They used to say, "Fine, you can have a big pay rise, but it's all got to be funded out of existing resources and the money that has already been allocated." That tactic meant that people might be paid more, but the money available elsewhere in the health service fell.

Mr. Gareth R. Thomas: I agree with the hon. Gentleman that there is a need for a mature debate about health, but does he recall the publication last autumn of a new Liberal Democrat consultation document on the subject? That document contained no costings and it appears that none will be supplied until just before the next general election. How can my constituents believe that the hon. Gentleman really wants a mature debate when he is not even prepared to attach financial costs to his plans?

Mr. Hughes: The hon. Gentleman has not been in the House long, so I do not criticise him if he is not aware that we have costed every alternative Budget that we have produced since my hon. Friend the Member for Gordon (Mr. Bruce) has been our Treasury spokesman. We costed every item in our manifesto before the election. In our conference health service debate last year, members of the Liberal Democrat party accepted that rationing existed in the NHS and that the right way forward was to define what the NHS does, work out how much it costs and then decide how to pay for it.
We have never ruled out raising taxation or abolishing prescription charges and other charges. The Labour Government should be a bit braver and respond more to the public mood. They should understand that people feel deceived and disappointed by two years of hesitancy, with NHS staff still so badly paid. If the Government were to realise that what we propose is in accord with what people want, perhaps they would not be in such difficulty over the matter.
Finally, I can tell the right hon. Member for Maidstone and The Weald—and those who speak on health in this House for all the other parties from all over the country—that the Liberal Democrats stand ready to implement the offer that I made to the Secretary of State. We believe that, in health as in other areas of public life, there should be a debate outside this House. That debate should involve professionals in the service, not just politicians and patients.
A forum should be established in which the long-term future of the health service is debated. The late John Smith set up the Borne commission—not on a narrow partisan basis—to look at social justice issues. The present Government have just announced a royal commission on the future of the other place. That is a proper way to gather opinion from all other sources.
We believe that such consultation should be conducted about the health service. I hope that, in the near future, the Secretary of State will respond with two announcements to today's call for a mature debate. First, he must admit that rationing exists; and secondly, he should promise that the health service of the future will be built on the views and experience of all concerned. In that way, perhaps, he can ensure that the pressure of so many crises in the health service can be alleviated, and that patients and staff who feel that too little progress has been made after two years of a Labour Government will no longer be so disillusioned.

Mr. Ivan Lewis: As this is an Opposition day debate, it is entirely appropriate to contrast 18 months of this Government with 18 years of the previous Administration. Sometimes it gets forgotten that the Conservatives had 18 years in which to fix the national health service. Throughout that period, they had to persuade the public continually that the service was safe in their hands. People drew the usual inference from such continual persuasion: they were not convinced that the NHS was safe in the Tories' hands.
The legacy left by the Tory Government to my right hon. Friend the Secretary of State and his colleagues on the Front Bench is not in dispute, even—I am sure—by the hon. Member for Southwark, North and Bermondsey (Mr. Hughes). That legacy was one of underfunding and low staff morale: it included an internal market more concerned with ideology than patient care and so obscene that it ended up costing the taxpayer billions of pounds in money spent on bureaucracy rather than on improving patient care.
The suspicion will always linger that the Opposition's agenda for the national health service—evidenced in debates such as this about rationing—is one of undermining public confidence as a precursor to arguing for privatisation. Tory Members may claim that that description is too dramatic, but we should remember what they did to community care and to dentistry—they privatised both, saying that there was no other option.

Dr. Brand: Will the hon. Gentleman give way?

Mr. Lewis: Not yet. If the Tories had been allowed to continue undermining the health service, I have no doubt that further privatisations would have followed. That would have been entirely consistent. Whenever this debate is held, the House should remember that Conservative Members are the most passionate advocates—and users—of the private health care system. Such people clearly have an interest in privatising more of the NHS.
The debate about rationing is another attempt to persuade the public that the NHS cannot be expected to meet their needs and to prevent people from having any great expectations of the service. That deliberate attempt to undermine public confidence is in clear contrast to the Government's approach. The Government have made massive extra investment in the health service, in return for its modernisation so that it is fit for the 21st century. They have not just thrown money at the problem, nor have they repeated the same old mistakes that have been made before. They have made the money available, and in return have demanded an improved quality of care.
The Government have committed themselves to an extra £21 billion in investment in the health service. People who talk about the private finance initiative should recall that the Tory PFI hospital building programme never got off the ground. Since this Government came to power, they have built hospital after hospital.
Waiting lists are falling. That was a clear election commitment, and the Government will be able to demonstrate at the next general election that that pledge has been met. The Government are also tackling the problem of clinical accountability, and not before time. For 18 years, general practitioners and hospital doctors


were allowed to be laws unto themselves, but the Government have said that that must come to an end. The Government have promised, where clinicians do not deliver the quality of care that we expect and need, that they will act in the interests of patients.
Primary care groups have replaced divisive GP fundholding, and health action zones will ensure a more cohesive and integrated approach to the delivery of health and social care. All relevant agencies—health services, social services and other local authority services, along with the voluntary sector—are co-operating in the treatment of patients and in the introduction of an ambitious public health strategy for the first time in this country. That is very important.
Some Labour Members would like the Government to go one step further, in line with the recent Health Committee report on the relationship between health and social services. The report states that:
the problems of collaboration between health and social services will not be properly resolved until there is an integrated health and social care system".
At least health action zones are a step in the right direction.
Health problems cannot be solved within the Department of Health or by Health Ministers alone; there is a broader agenda. Social exclusion policies will tackle the root causes of poverty, family breakdown and, ultimately, ill health. Gone are the futile policies of the Conservative Government, who did not merely ignore but denied the link between poverty and ill health.

Mr. Bercow: I am sure that the hon. Gentleman would not chunter on about primary care groups without first troubling to do his homework on their cost. Will he tell the House what he estimates to be the additional annual cost to the NHS budget that is created by the establishment of primary care groups?

Mr. Lewis: We are talking about significantly reducing bureaucracy, and devolving power and resources from health authorities down to GPs and the people who are closest to patients. It is nonsense to talk about extra costs when the policy is designed to reorganise the way in which money is spent in the health service and to ensure that it is spent more cost effectively and as close to the patient as possible. There can be no doubt that the overall objective of the Labour Government's health reforms is to achieve a significant reduction in the money spent on bureaucracy, which will allow money to be redirected to patient care.
The Government cannot turn around overnight 18 years of neglect and undermining, and no one—neither the public nor health care professionals—expects them to do that. Our objective is to be able to face the British people at the next election and say that we have not only met our pre-election pledges on the health service but have considerably surpassed the objectives we set ourselves before the election to modernise the NHS. We do not want merely to claim that the NHS is safe in our hands, for the NHS is the embodiment of all that the Labour party believes in. The Labour party created the NHS and it is entirely appropriate that the Labour party is charged with the responsibility of modernising it.

Mrs. Marion Roe: Rationing exists in the national health service. In a cash-limited system, it cannot but exist and it is sheer folly to suggest that it does not. Rationing has existed since the health service began, with general practitioners controlling access to services and treatments, and hospitals manipulating their waiting lists. Demand has always outstripped resources and provision. The words spoken in the House by the Minister for Public Health when she said that rationing simply does not exist within the NHS must hang heavily, like an albatross around her neck. The Health Committee, of which I was Chairman for five years, recognised the existence of rationing in its inquiries into priority setting in the NHS. It produced reports on the drugs budget and on purchasing in 1994 and 1995, so this is not the first time that such issues have been debated.
The Conservative Government recognised the bottomless pit of demand and used the reforms of the 1990s to address it. They created a fundholding system that put GPs at the centre, providing care for a population they knew. It enabled GPs to set priorities and to identify those in greatest need, and so provided a bespoke health care service that was sensitive to the individual. Resources could be used flexibly and cost effectively, so many more patients could receive care. As a result of Conservative policy, many more staff were employed. The Conservative Government concentrated on waiting times, not on waiting lists, and in less than four years, they reduced from more than nine months to less than four months the average time that patients had to wait before being admitted to hospital. Sadly, that good work is being undone and patients now wait ever longer for admission.
We now have a Government who, with the greatest respect, are deceitful and duplicitous: they deny that rationing exists while taking steps to conceal the shortcomings of their own policies. There is cynical manipulation of patients through the waiting list money being hurled at the system by the Secretary of State. Waiting lists are the tap that turns health care on and off, but under the current system, there is no logical method for selecting patients from the waiting list. Managers rearrange cases so that if the Government want a number of patients treated, they get that number of patients treated, often without consideration being given to the severity of patients' condition or the distress that failure to be selected may cause.
A facile scattergun approach has been adopted—one that takes no account of the time that people spend waiting and fails to recognise that need should be the key determinant of care. In the pool of patients waiting to be fished out for treatment, Government initiatives encourage the rescue of those in shallow water—the patients most easily treated, who occupy a bed for the shortest time—to ensure rapid turnover. The patients in the deepest water are often left longest and some drown while waiting.
How have the Government approached the problem of infinite demand and finite resources? They have come up with primary care groups, which are a rag bag of ideas, hastily cobbled together. They force GPs to relinquish personalised care and give up valuable clinical time to undertake management roles for which they are neither trained nor enthusiastic. They are inadequately funded,


rely on good will for their operation and are supplied with a mass of guidance—often contradictory—within which to operate.
Let us take health service circular 1998/139, entitled "Developing Primary Care Groups". Paragraph 52 states:
The ability to offer patients the individual care they require has been and remains the cornerstone of general practice. The new system will continue to allow individual GPs to decide what is best for the patient, whether, for example, to prescribe drugs or refer patients to hospitals in the light of their clinical judgment. The freedom to refer and prescribe remains unchanged.
The best bit is:
Patients will continue to be guaranteed the drugs, investigations and treatments they need".
The Government are clearly saying that there is to be no rationing—but wait, what about the next paragraph?
Paragraph 53 states:
Primary care groups will be expected to live within their budgets. Where a group is forecasting an overspend it must work with its host health authority to manage the position in-year".
So, there is to be rationing after all, with guidance telling GPs, "Give patients whatever they need, but don't spend money doing it." What a devious philosophy. We know that more than one third of health authorities are overspent.
Only a confused Government bent on folly could believe that rationing could be abolished and money saved by fragmenting the service, destroying management and delegating the operation of the system to inexperienced doctors. Already the evidence is beginning to appear. The Government suggest that inequity must be tackled by levelling up, but what is really happening? The first decisions made by fledgling PCGs are to scrap in-house clinics to save money and to reduce GP practices' drug budgets to save money. That is not levelling up; it is dumbing down.
Survey after survey of medical professionals shows conclusively that rationing is preventing patients from getting the care they need. Only last week, a survey in Doctor magazine revealed a damning indictment of the Government's policies and made a laughing stock of their denials. Of respondents, 97 per cent. believe that rationing is inevitable, 79 per cent. say that services or treatment have been withdrawn and 20 per cent. said that patients had suffered as a result of rationing; most serious is the fact that one in 20 said that patients had died as a result. In my constituency, infertility treatment is a thing of the past, plastic surgery is extremely difficult to obtain and even hip pain is no longer an indicator for a joint replacement.
We do not need denials of rationing: we need a fair and effective mechanism for managing rationing. We need mature debate, not meaningless rhetoric. We do not need the Government's retreat to the magical, mystical modernisation fund which they claim will do so much, yet has been spent five times over in successive health circulars. The health professions recognise it and the public accept it: the evidence is clear. When citizens' juries, focus groups and individuals are presented with the facts, they can understand complex medical and case-mix issues. They can arrive at sensible decisions about who gets what.
Rationing is not a job for managers: they do not have the knowledge and it invites public disapprobation. GPs may be the best option, but they are increasingly

uncomfortable with that demand. The Doctor magazine survey showed that 80 per cent. of doctors recognise that rationing is a cause of friction between them and their patients. Increasing complexity makes decisions more difficult, and many doctors say that that is not why they entered the medical profession. Other GPs may use rationing as a political tool. It would not be difficult to break the bank and stay within ethical and contractual responsibilities.

Mr. Dawson: Why should the term "rationing" be used in relation to the health service when it is applied to no other area where infinite demand will always be met with finite resources? Does not "rationing" have pejorative overtones?

Mrs. Roe: That word has been used for many years to describe the budgetary dilemmas that certain doctors and hospitals face. We should use the term "rationing" and be open about it. In Health Committee meetings, we used the word "priorities", but we also referred to "rationing" because it meant something to the people who were giving evidence.

Dr. Brand: Will the hon. Lady give way?

Mrs. Roe: No, I will not give way any more as I am under a time constraint.
The Government's disordered and ill-thought-through approach must be replaced by a wider debate involving the consumers. As the hon. Member for Southwark, North and Bermondsey (Mr. Hughes) has already said, the most controversial questions must be addressed if we are to make such a debate meaningful. We must certainly ask why the Government have not recognised the key inefficiencies of the NHS that the previous Government tackled. Where is the cost-effective management, clinician innovation and progress? In short, we must replace rationing with rationale, rhetoric with responsibility and words with deeds.

Dr. Howard Stoate: I have listened to the debate with great interest as it is about an area that is dear to my heart. In opening the debate, the right hon. Member for Maidstone and The Weald (Miss Widdecombe) called for a mature and adult discussion of the future of the health service. It obviously takes at least 18 years for Conservative Members to reach maturity, because that is the first that we have heard of anything approaching an adult and mature debate. Unfortunately, I am afraid that Opposition Members have failed in that endeavour this afternoon. They expressed a desire to discuss the mature issues of the day, but spoiled it by using soundbite politics and rhetoric that is designed to scare rather than inform people.
I was a doctor throughout the 18 years of the previous Government, and never once did I hear mention of the word "rationing"—it never crossed the Government's lips. It was not an area for discussion. There are real debates to be had, and I would like to enter into genuine, meaningful and mature debates about the health service. We must consider what we can expect of the health service as we enter the next millennium. There is no question but that expectations are changing. People expect


and deserve better health care, better services and improved life expectancy—and that is what they should receive.
Health possibilities change daily. We can now operate on babies in the womb and talk about the possibility of replacing brain cells in people with Parkinson's disease. Ten years ago, such procedures were science fiction. We now rely far more on evidence-based medicine that enables us to back up our decisions with meaningful science. I shall concentrate on the issue of rational science in my speech today.
No system in the world will ever meet every need that is placed upon it—and we cannot pretend that it will. However, when we decide to prioritise in a particular area, our decision must be backed by sound science. We have heard much this afternoon about media hype regarding the NHS crisis. The NHS has always been under pressure. I have endured 20 winters as an NHS doctor, and every year there has been a problem with the availability of NHS beds, people on trolleys and waiting lists. However, the reality is that my health authority experienced one bad day this year and that difficulty was ameliorated tremendously because the winter pressures money allowed social services teams to care for people in their own homes. The Government said that we would provide assistance, and that is what we have delivered.

Mr. David Maclean: rose—

Dr. Stoate: I am sorry, there is no time to give way.
I shall give an example. My hon. Friend the Member for Wakefield (Mr. Hinchliffe) mentioned that I am a general practitioner. I saw a patient—a lady with a breast lump—on 4 January. She had just noticed the lump, which I suspected might be cancerous. I faxed a letter on the same day—4 January—to the consultant in charge of my local breast unit. On 7 January, the senior consultant saw my patient and carried out a needle biopsy and a mammogram. The results were inconclusive, but the lump is probably not malignant. Those results were arrived at only three days after I referred the lady to a consultant. She has been booked in to have an operation next week to remove the lump because we want to be on the safe side when managing a patient's condition.
That is the reality of what the health service can deliver because this Government have put money into breast cancer treatment, just as we promised we would. Patients do not have to wait two weeks for an opinion: they can get one in three days during a so-called "NHS crisis". That is the reality of what the Government can do. The truth is that, while we need to debate priorities in the health service, we will not hear such dialogue from Opposition Members. We need to examine the public's priorities and what people would like to see from the health service in the next few years. As medical knowledge progresses, attitudes must change accordingly.
I shall give another example. A few years ago, a lady who suffered from menstrual pain was likely to undergo a dilatation and curettage. That operation was carried out thousands of times a year on the national health service. However, it is not done any more because medical evidence has shown that it is useless and, in most cases, achieves nothing. Using evidence-based medicine, the operation

has been phased out of the health service. That is one result of a mature debate about how medical science has progressed, and attitudes and clinical science have changed.
I want organisations such as the national institute for clinical excellence to be able to review world literature about what constitutes best medical practice. That would enable the best medical treatments to be passed on to all clinicians in the field. It would ensure that useless operations and procedures were abandoned and that good operations and useful procedures were enhanced. In that way, money could go a lot further and be used to treat many more patients more effectively within the constraints of any publicly or privately funded institution.
That is the sort of dialogue that I wish to have. We must consider how best medical knowledge and practice can be used to inform debate in order to help those in difficult situations. That is the sort of issue that we should consider in Parliament. We need proper, rational, adult debate rather than sterile soundbites and competitions to discover who can score the biggest political points. That does not help the situation. The people want their NHS to deliver services for them. They want to know that best practice and clinical governance is ensuring that the best medical knowledge from throughout the world is focused on their personal medical needs. That is what the Government are doing and that is why I am proud to support this Government.

Mr. Alan Duncan: We are having this debate today because, if one cares about the national health service, the first thing that one should do is tell the truth about it. In the three hours or so of debate today, it has become apparent that the Government refuse to tell the truth about the most fundamental and simple point governing any policy that will shape the future of the NHS. It seems that they have fallen into the trap of believing their own publicity; so much so that the Secretary of State—who, I am sure, will return to his place in a moment—spoke to a motion that bore no relation whatever to the one that we tabled. I was confused, but only because I could not work out whether his contribution was neanderthal or palaeolithic. It was a smokescreen of bluff and fundamentally intellectually dishonest. What a contrast it was to the contribution of my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke). [Interruption.]
We welcome the Secretary of State back to the Chamber. For his benefit, I point out that I am recalling the barnstorming contribution of my right hon. and learned Friend the Member for Rushcliffe, who carried out radical surgery on the Secretary of State, but, I fear, will not have cured him of his lamentable condition. Similarly, my hon. Friend the Member for Broxbourne (Mrs. Roe) was absolutely right in what she said.
We are trying to establish a simple point that every schoolchild will realise is true. We have no prospect of making any progress in having a sensible debate on the national health service unless we understand the basic pattern of demand and supply in a massive endeavour that is financed out of general taxation and free at the point of sale.

Mr. Hinchliffe: Free at the point of delivery.

Mr. Duncan: Yes, free at the point of delivery. [Interruption.]

Mr. Deputy Speaker (Mr. Michael J. Martin): Order. We must have order in the Chamber.

Mr. Duncan: I do not mind acknowledging the first sensible contribution that the hon. Member for Wakefield (Mr. Hinchliffe) has made today.
This is key stage 1 economics, which the Secretary of State and all the Ministers beside him—particularly, given what she said before Christmas, the Minister for Public Health—refuse to admit. There cannot be equilibrium in a system that does not have a pricing structure unless there is infinite funding of a system that faces infinite demand. That is so simple and obvious that there seems to be no point in the Minister for Public Health and her colleagues on the Government Front Bench denying it. The right hon. Lady and the Secretary of State are committing us to a sterile debate that will bedevil the future of health care in this country.

Dr. Brand: Does the hon. Gentleman agree that it is particularly important to acknowledge that rationing exists because the previous Government denied its existence and therefore managed to privatise long-term care and dentistry?

Mr. Duncan: We never denied the existence of rationing. That is why we introduced measures such as the private finance initiative, which the Secretary of State is now at last adopting, even though he lampooned and derided it in opposition.
We have been drawn into a sterile debate, which, as the hon. Member for Southwark, North and Bermondsey (Mr. Hughes) pointed out, takes us into a meaningless auction about who is spending more. We compare percentages and amounts, which are rolled up into gross figures by the Secretary of State to reach his figure of £21 billion. However, there is no point in any of that unless there can be a sensible debate about how the health service is funded and about the fact that there is rationing in the service, always has been and always will be.
This sterile debate only brings politics in disrepute. The Secretary of State is guilty of that. He always looks around and chats to his ministerial team when he is being mentioned in the House, as he was so rudely doing when my right hon. Friend the Member for Maidstone and The Weald (Miss Widdecombe), the shadow Health Secretary, mentioned him this afternoon. There is rationing and, if the Secretary of State does not believe that, I will give him the latest example of the fiasco that is his waiting list policy—a form of rationing if ever there was one.
I have a letter from a doctor at a hospital in Leeds, which says:
Due to the enormity of my in-patient waiting list, I am unable to see new patients requiring operative intervention for a considerable period of time. As my current waiting time for surgery is in excess of 18 months, I am now not going to be in a position to see new patients until my waiting time for surgery drops below nine months. There is therefore going to be an inevitable delay of several years before I am likely to be able to see your patient.
If that is not rationing, what is? If the Secretary of State is not prepared to admit the condition of the health service, which he is making worse, I do not know what the world will think of him.
The Secretary of State derided Doctor magazine.

Mr. Dobson: Yep.

Mr. Duncan: The right hon. Gentleman says, "Yep". I think that is his word for "yes". An article in Hospital Doctor magazine, entitled "How rationing splits you and the patient", contains a box headed "Squaring up", which says:
Many doctors try to be honest with patients about clinical rationing".
When will the Secretary of State square up and be equally honest with the patients whom he is cheating day in and day out?
If there is no rationing, why is a whole edition of Doctor magazine devoted to the issue? It says that its exclusive research, carried out with Hospital Doctor—which the Secretary of State also derides—is the biggest survey yet of doctors' experience of rationing and that the results offer compelling evidence that the Government must acknowledge that rationing is an everyday reality in the national health service. That statement is made not in black and white but, more appealing to the Secretary of State, in red and white. Perhaps he can at least admit the basic fact that the health service is now facing rationing.
The Secretary of State has promised a statement on Viagra, although we have not yet received it.

Mr. Dobson: indicated assent.

Mr. Duncan: The right hon. Gentleman nods. Where is it?

Mr. Dobson: It is coming up.

Mr. Duncan: It is coming up. The Secretary of State makes a quip, with a smile on his face. I hope that we can get some answers, because many people want to know if they will be prescribed Viagra on the national health service or whether there will be an extension of the rationing that he says does not exist.
The Conservative party is interested not only in the national health service, but in all health care in the country. We are prepared to admit that there is rationing in the NHS and to consider the public-private mix that might improve health care overall.
We have listened today to backward, old-fashioned old Labour comment about the private sector. If Labour Members want to stick to those old nostrums and deny people in Britain the health care that could better be delivered to them if those Members were not so luddite in their attitude, so be it. People will soon realise that Labour's approach is so backward-looking that it is denying people the health care that they could otherwise receive. There is too much old-fashioned dogma. The Secretary of State will not admit the basic fact that rationing exists, so his policy will run further into the sand, and health care in this country will have been hindered and hampered by the wilful ignorance of this deluded Government.

The Minister of State, Department of Health (Mr. John Denham): The Opposition called today's debate on the pretext of talking about what they call rationing. Labour Members are happy to discuss the speed, availability and effectiveness of treatment on the national health service. Indeed, I shall spend most of my few minutes at the end of this debate talking about that.
It is clear to anyone who has listened to the debate how right wing and out of touch Tory Front Benchers are. I stand willing to be corrected, but I listened to the contribution of the right hon. and learned Member for Rushcliffe (Mr. Clarke), who was full of praise for the right hon. Member for Maidstone and The Weald (Miss Widdecombe), who spoke from the Front Bench, and he singularly failed to endorse the right hon. Lady's ideas for the future of private medicine in the health service. The right hon. Lady's speech and those of other Conservative Front Benchers have made it clear that, for them, today's debate has not been about improving the national health service.

Mr. Kenneth Clarke: We spent the past 18 years being accused of secretly plotting to privatise the health service and, before we go down that curious path again, I point out that we are no more guilty of it now than we were before. To all Conservatives, it is self-evident that a healthy private sector relieves the pressures on the national health service. That is not inconsistent with wanting a better NHS consistent with all the fine principles on which it is based and which we all endorse. It is a great pity to hear old Labour's arguments so faithfully trotted out whenever we discuss the NHS when Labour is now charged with the responsibility of government and ought to be discussing what is happening now.

Mr. Denham: It is very interesting to hear the right hon. and learned Gentleman; he still has not endorsed what his right hon. Friend the Member for Maidstone and The Weald said. As for the old Labour argument, I wonder whether the right hon. and learned Gentleman agrees that
The national health service is not intended to be a safety net, a guarantor of a minimum standard to those who can afford better private care. It is intended to use taxpayers' funds to provide access to the best of modern clinical practice, and to do so on the basis of the patient's clinical need and without regard to his or her financial circumstances.
That is not what we heard that from the right hon. Lady. Those are the words of the previous Conservative Secretary of State for Health, the right hon. Member for Charnwood (Mr. Dorrell).
Today's debate has not been about improving the NHS. As my hon. Friend the Member for Wakefield (Mr. Hinchliffe) said, it has been about giving up the ghost on the NHS. The Conservative argument is not that the NHS is coping, but that it cannot cope—not today, not tomorrow, not ever. Even Baroness Thatcher thought that she should claim that the NHS was safe in her hands. The right hon. Member for Maidstone and The Weald had no such reservation.

Mr. Andrew Lansley: Will the hon. Gentleman give way?

Mr. Denham: No, I have only very limited time, and have already allowed a considerable intervention.
We heard a softening-up job—softening up of the public for a Tory party that does not believe that the job of making the health service work is worth the candle.

People have been warned. The right hon. Member for Maidstone and The Weald would have done well to listen to the right hon. Member for Charnwood, when he said:
I believe that those who argue that the national health service is unaffordable have fallen victim to an old law. Every difficult and intractable question has an answer that is simple, obvious and wrong.
A better summary of the right hon. Lady's speech I cannot imagine.
The main claim that the right hon. Member for Maidstone and The Weald made was that there is rationing in the NHS. I shall point out, as others have, that, if she believes that, she must also say that there was rationing under the 18 years of Conservative government; yet the previous Government never talked about it.

Miss Widdecombe: It says so in the motion—as the hon. Gentleman would know if he read it.

Mr. Denham: The right hon. Lady made no mention of that when in government, despite the considerable opportunities to do so. Indeed—there is some sense in this—the previous Government said:
Budgets will always be finite while demand is potentially open-ended. There will always be a gap between all we wish to do and all that we can. Setting priorities is a fact of life.
I agree. There has been a need to set priorities in the health service from the beginning. There is such a need in every health service in the world. The challenge is to set those priorities properly, sensitively and effectively; to ensure that every penny that the NHS has is used to treat patients to the best effect.

Mr. Lansley: Will the hon. Gentleman give way?

Mrs. Angela Browning: Will the hon. Gentleman give way?

Mr. Denham: No, I have made it perfectly clear that I am not intending to do so. [Interruption.]

Mr. Deputy Speaker: Order. The hon. Member for Tiverton and Honiton (Mrs. Browning) should calm down. The Minister is not giving way.

Mr. Denham: I am not intending to allow interventions because I want to make my points on priorities in the NHS.
This Government, as my hon. Friend the Member for Bury, South (Mr. Lewis) has reminded us, are investing record amounts. We put in an extra £2.25 billion in our first two years in office. There will be £20 billion more over the next three years. I found it strange that the hon. Member for Broxbourne (Mrs. Roe) complained that we were throwing money at the system. We are investing far more in the health service than any other party promised or contemplated in this Parliament.
Clinical judgment is at the heart of decision making in the NHS. But, to make the best use of that money, people working in the NHS and those taking decisions in it need to know what works and what does not. They need to be aware of the costs of what they do and the most cost-effective and clinically effective way of doing it. The NHS needs to be organised, so that decision making is effective and reflects national and local interest. The most


damning indictment of the past 18 years of Conservative government is that the Tories failed in that key task. That is why, all too often, there are differences and variations in the health service that the Tories left behind.
It is true that patients with the same need will not always receive the same treatment. Some patients do not do so because the internal market was designed to set doctor against doctor, patient against patient, hospital against hospital. That was the entire logic of the internal market—each fundholding practice focusing only on the needs of its own patients; each trust focusing only on the patients sent to it.
Of course, in such a system, everyone has been working to do their best—GPs for their patients, hospitals for the people who are sent to them. However, doctors and nurses in every hospital know that they could see fewer patients with less severe conditions if the links between primary and secondary care were better. Doctors in every GP practice know that their work load reflects the failure to tackle the roots of ill-health and health inequalities in the wider community—in work, in provision for young children and through social exclusion. Yet those professionals are without the power to influence the way in which problems are tackled. We will abolish the internal market, replacing division and competition with co-operation and partnership. We shall improve primary care, ensuring that the whole service works together to tackle health inequalities.
The internal market is not the only problem. When hard-pressed doctors do not always have the latest information and analysis to hand, some patients will receive treatment that is not the most clinically effective and cost-effective.

Mr. Kenneth Clarke: Will the hon. Gentleman give way?

Mr. Denham: I have already given way to the right hon. and learned Gentleman. [Interruption.] Conservative Members do not want to be told why, in the health service that they have created, there are variations in treatment and access to treatment in different parts of the country.
One of the reasons for such variation is that there is no organisation that brings together in one place the best, evidence-based assessment of the latest treatment, drugs, surgical procedures and new technologies. As a result, despite the best efforts of professionals in the NHS, some patients do not receive the most cost-effective and clinically effective treatment. Some receive treatment that costs money but does not work well, or of which the risks may outweigh the benefits. When that happens, money is wasted—money that could have funded treatment for someone else. The organisation that could provide that information does not exist. Nor have we effective ways of getting information to those who need it. The national institute for clinical excellence will do that job, getting that information to doctors.
With total predictability, the Conservative party opposes such a proposal. It would rather that doctors worked without the latest information and patients received second best. It would prefer taxpayers' money to be wasted on ineffective treatment. It would rather that patients waited longer to benefit from proven advances in medical science.
Some patients do not receive comparable treatment because the NHS bequeathed by the Tories has lacked the tools to analyse how to manage services effectively. It

has lacked the encouragement to work together to tackle inequalities in health provision. The Tories' health service could not measure the difference between a really well-run hospital and a poorly run one. We know the cost of seeing a consultant in every hospital, but not whether people get better having done so. Nor do we know whether there is fair access to services, or what patients and carers think of the services that they receive.
We shall introduce better performance measures—counting the things that count for patients. The commission for health improvement will oversee the quality of care in hospitals. We are setting out national service frameworks to define the standards that everyone should be able to enjoy. We will ensure that patients have better information, so that they can make the best use of the NHS. By April, 40 per cent. of England will be covered by NHS Direct—telephone advice from nurses 24 hours a day.
The message from the Opposition is clear: the Conservative party has given up on the NHS. We reject its pessimism; so do the British public. There has always been a need to set priorities in the health service, and our priorities are clear. We are funding extra nurses. We are training more doctors. One in four accident and emergency departments will be modernised in the coming year. Our priorities are making available money for winter pressures; investment in modernisation; better information; less waste, and co-operation instead of competition. And the principles remain the same: that if people
are ill or injured there will be a national health service there to help: and access to it will be based on need and need alone, not on ability to pay".

Question put, That the original words stand part of the Question:—

The House divided: Ayes 169, Noes 336.

Division No. 34]
[7 pm


AYES


Ainsworth, Peter (E Surrey)
Clark, Rt Hon Alan (Kensington)


Allan, Richard
Clark, Dr Michael (Rayleigh)


Amess, David
Clarke, Rt Hon Kenneth (Rushcliffe)


Ancram, Rt Hon Michael
Clifton—Brown, Geoffrey


Arbuthnot, Rt Hon James
Cormack, Sir Patrick


Ashdown, Rt Hon Paddy
Cotter, Brian


Atkinson, Peter (Hexham)
Cran, James


Baldry, Tony
Davey, Edward (Kingston)


Beith, Rt Hon A J
Davis, Rt Hon David (Haltemprice)


Bercow, John
Day, Stephen


Beresford, Sir Paul
Dorrell, Rt Hon Stephen


Body, Sir Richard
Duncan, Alan


Boswell, Tim
Duncan Smith, Iain


Bottomley, Peter (Worthing W)
Emery, Rt Hon Sir Peter


Bottomley, Rt Hon Mrs Virginia
Evans, Nigel


Brake, Tom
Faber, David


Brand, Dr Peter
Fallon, Michael


Brazier, Julian
Flight, Howard


Brooke, Rt Hon Peter
Forth, Rt Hon Eric


Browning, Mrs Angela
Foster, Don (bath)


Bruce, Ian (S Dorset)
Fowler, Rt Hon Sir Norman


Burns, Simon
Fox, Dr Liam


Burstow, Paul
Gale, Roger


Campbell, Menzies (NE Fife)
George, Andrew (St Ives)


Cash, William
Gibb, Nick


Chapman, Sir Sydney (Chipping Barnet)
Gill, Christopher


Chidgey, David
Gillan, Mrs Cheryl


Chope, Christopher
Goodlad, Rt Hon Sir Alastair


Clappison, James
Gorman, Mrs Teresa






Gray, James
Ottaway, Richard


Green, Damian
Page, Richard


Greenway, John
Paterson, Owen


Grieve, Dominic
Pickles, Eric



Hague, Rt Hon William
Prior, David


Hamilton, Rt Hon Sir Archie
Randall, John


Hammond, Philip
Redwood, Rt Hon John


Harris, Dr Evan
Rendel, David


Harvey, Nick
Robathan, Andrew


Hawkins, Nick
Robertson, Laurence (Tewk'b'ry)


Hayes, John
Roe, Mrs Marion (Broxbourne)


Heald, Oliver
Rowe, Andrew (Faversham)


Heath, David (Somerton & Frome)
Russell, Bob (Colchester)


Heathcoat—Amory, Rt Hon David
Sanders, Adrian


Hogg, Rt Hon Douglas
Sayeed, Jonathan


Horam, John
Shephard, Rt Hon Mrs Gillian


Howard, Rt Hon Michael
Simpson, Keith (Mid-Norfolk)


Howarth, Gerald (Aldershot)
Smith, Sir Robert (W Ab'd'ns)


Hughes, Simon (Southwark N)
Smyth, Rev Martin (Belfast S)


Hunter, Andrew
Soames, Nicholas


Jack, Rt Hon Michael
Spelman, Mrs Caroline


Jenkin, Bernard
Spicer, Sir Michael


Johnson Smith, Rt Hon Sir Geoffrey
Spring, Richard


Jones, Nigel (Cheltenham)
Stanley, Rt Hon Sir John


Kennedy, Charles (Ross Skye)
Streeter, Gary


Key, Robert
Stunell, Andrew


King, Rt Hon Tom (Bridgwater)
Swayne, Desmond


Kirkbride, Miss Julie
Syms, Robert


Laing, Mrs Eleanor
Tapsell, Sir Peter


Lait, Mrs Jacqui
Taylor, Ian (Esher & Walton)


Lansley, Andrew
Taylor, Matthew (Truro)


Leigh, Edward
Taylor, Sir Teddy


Letwin, Oliver
Townend, John


Lewis, Dr Julian (New Forest E)
Tredinnick, David


Lidington, David
Trend, Michael


Lilley, Rt Hon Peter
Tyler, Paul


Lloyd, Rt Hon Sir Peter (Fareham)
Tyrie, Andrew


Llwyd, Elfyn
Viggers, Peter


Loughton, Tim
Walter, Robert


Luff, Peter
Wardle, Charles


Lyell, Rt Hon Sir Nicholas
Webb, Steve


McIntosh, Miss Anne
Wells, Bowen


MacKay, Rt Hon Andrew
Welsh, Andrew


Maclean, Rt Hon David
Whitney, Sir Raymond


Maclennan, Rt Hon Robert
Whittingdale, John


McLoughlin, Patrick
Widdecombe, Rt Hon Miss Ann


Madel, Sir David
Wilkinson, John


Major, Rt Hon John
Willetts, David


Malins, Humfrey
Willis, Phil


Maples, John
Wilshire, David


Mates, Michael
Winterton, Mrs Ann (Congleton)


Mawhinney, Rt Hon Sir Brian
Winterton, Nicholas (Macclesfield)


May, Mrs Theresa
Yeo, Tim


Michie, Mrs Ray (Argyll & Bute)
Young, Rt Hon Sir George


Moss, Malcolm
Tellers for the Ayes:


Nicholls, Patrick
Mr. John M. Taylor and


Oaten, Mark
Mr. Tim Collins.


NOES


Abbott, Ms Diane
Beckett, Rt Hon Mrs Margaret


Ainger, Nick
Begg, Miss Anne


Ainsworth, Robert (Cov'try NE)
Bell, Martin (Tatton)


Allen, Graham
Bell, Stuart (Middlesbrough)


Anderson, Donald (Swansea E)
Benn, Rt Hon Tony


Anderson, janet (Rossendale)
Bennett, Andrew F


Armstrong, Ms Hilary
Benton, Joe


Ashton, Joe
Bermingham, Gerald


Atherton, Ms Candy
Berry, Roger


Atkins, Charlotte
Best, Harold


Austin, John
Blair, Rt Hon Tony


Barnes, Harry
Blears, Ms Hazel


Barron, Kevin
Blizzard, Bob


Battle, John
Boateng, Paul 


Bayley, Hugh
Borrow, David


Beard, Nigel
Bradley, Keith (Withington)





Bradley, Peter (The Wrekin)
Flint, Caroline




Bradshaw, Ben



Brinton, Mrs Helen
Flynn, Paul


Brown, Rt Hon Gordon (Dunfermline E)
Follett, Barbara


Browne, Desmond
Foster, Rt Hon Derek


Buck, Ms Karen
Foster, Michael Jabez (Hastings)


Burden, Richard
Foster, Michael J (Worcester)


Burgon, Colin
Foulkes, George


Butler, Mrs Christine
Fyfe, Maria


Caborn, Richard
Gapes, Mike


Campbell, Alan (Tynemouth)
Gardiner, Barry


Campbell, Mrs Anne (C'bridge)
Gerrard, Neil


Campbell, Ronnie (Blyth V)
Gibson, Dr Ian


Campbell—Savours, Dale
Gilroy, Mrs Linda


Canavan, Dennis
Godman, Dr Norman A


Caplin, Ivor
Godsiff, Roger


Casale, Roger
Goggins, Paul


Cawsey, Ian
Gordon, Mrs Eileen


Chapman, Ben (Wirral S)

Griffiths, Jane (Reading E)


Chisholm, Malcolm
Griffiths, Nigel (Edinburgh S)


Clapham, Michael
Griffiths, Win (Bridgend)


Clark, Paul (Gillingham)
Grocott, Bruce


Clarke, Charles (Norwich S)
Grogan, John


Clarke, Eric (Midlothian)



Clarke, Rt Hon Tom (Coatbridge)
Gunnell, John


Clarke, Tony (Northampton S)
Hall, Mike (Weaver Vale)


Clelland, David
Hall, Patrick (Bedford)


Clwyd, Ann
Hamilton, Fabian (Leeds NE)


Coaker, Vernon
Hanson, David


Coffey, Ms Ann
Heal, Mrs Sylvia


Coleman, Iain
Healey, John


Colman, Tony
Henderson, Doug (Newcastle N)


Connarty, Michael
Henderson, Ivan (Harwich)


Cook, Frank (Stockton N)
Hepburn, Stephen


Cook, Rt Hon Robin (Livingston)
Heppell, John


Cooper, Yvette
Hesford, Stephen


Corbett, Robin
Hewitt, Ms Patricia


Corbyn, Jeremy
Hill, Keith


Corston, Ms Jean
Hinchliffe, David


Cousins, Jim
Hoey, Kate


Cranston, Ross
Home Robertson, John


Crausby, David
Hoon, Geoffrey


Cryer, Mrs Ann (Keighley)
Hope, Phil


Cryer, John (Hornchurch)
Hopkins, Kelvin


Cummings, John
Howarth, George (Knowsley N)


Cunliffe, Lawrence
Howells, Dr Kim


Cunningham, Rt Hon Dr Jack (Copeland)
Hoyle, Lindsay


Cunningham, Jim (Cov'try S)
Hughes, Ms Beverley (Stretford)


Dalyell, Tam
Humble, Mrs Joan


Daryell, Keith
Hurst, Alan


Davey, Valerie (Bristol W)
Hutton, John


Davies, Rt Hon Denzil (Llanelli)
Iddon, Dr Brian


Davies, Geraint (Croydon C)
Illsley, Eric


Davies, Rt Hon Ron (Caerphilly)
Jackson, Ms Glenda (Hampstead)


Dawson, Hilton
Jackson, Helen (Hillsborough)


Dean, Mrs Janet
Jamieson, David


Denham, John
Jenkins, Brian


Dismore, Andrew
Johnson, Alan (Hull W & Hessle)


Dobbin, Jim
Johnson, Miss Melanie (Welwyn Hatfield)


Dobson, Rt Hon Frank
Jones, Barry (alyn & Deeside)


Donohoe, Brian H
Jones, Mrs Fiona (Newark)


Doran, Frank
Jones, Helen (Warrington N)


Dowd, Jim
Jones, Ms Jenny (Wolverh'ton SW)


Drew, David
Jones, Dr Lynne (Selly Oak)


Dunwoody, Mrs Gwyneth
Jowell, Ms Tessa


Eagle, Angela (Wallasey)
Keeble, Ms Sally


Eagle, Maria (L'pool Garston)
Keen, Ann (Brentford & Isleworth)


Efford, Clive
Kelly, Ms Ruth


Ellman, Mrs Louise
Kemp, Fraser


Fatchett, Derek
Kennedy, Jane (Wavertree)


Field, Rt Hon Frank
Khabra, Piara S


Fisher, Mark
Kidney, David


Fitzpatrick, Jim
Kilfoyle, Peter


Fitzsimons, Lorna
King, Ms Oona (Bethnal Green)



Kingham, Ms Tess






Kumar, Dr Ashok
Pickthall, Colin


Ladyman, Dr Stephen
Pike, Peter L


Lawrence, Ms Jackie
Plaskitt, James


Laxton, Bob
Pollard, Kerry


Lepper, David
Pond, Chris


Leslie, Christopher
Pope, Greg


Levitt, Tom
Pound, Stephen


Lewis, Ivan (Bury S)
Powell, Sir Raymond


Lewis, Terry (Worsley)
Prentice, Ms Bridget (Lewisham E)


Linton, Martin
Prentice, Gordon (Pendle)


Lloyd, Tony (Manchester C)
Prescott, Rt Hon John


Lock, David
Primarolo, Dawn


McAvoy, Thomas
Prosser, Gwyn


McCabe, Steve
Purchase, Ken


McCafferty, Ms Chris
Quin, Ms Joyce


McCartney, Ian (Makerfield)
Quinn, Lawrie


McDonagh, Siobhain
Rammell, Bill


McDonnell, John
Rapson, Syd


McGuire, Mrs Anne
Raynsford, Nick


McIsaac, Shona
Reed, Andrew (Loughborough)



Reid, Rt Hon Dr John (Hamilton N)


Mackinlay, Andrew
Robertson, Rt Hon George (Hamilton S)


McNulty, Tony
Robinson, Geoffrey (Cov'try NW)


MacShane, Denis
Roche, Mrs Barbara


Mactaggart, Fiona
Rooney, Terry


McWalter, Tony
Ross, Ernie (Dundee W)


McWilliam, John
Rowlands, Ted



Mahon, Mrs Alice
Ruane, Chris


Mallaber, Judy
Russell, Ms Christine (Chester)


Mandelson, Rt Hon Peter
Ryan, Ms Joan


Marek, Dr John
Salter, Martin


Marsden, Gordon (Blackpool S)
Savidge, Malcolm


Marsden, Paul (Shrewsbury)
Sawford, Phil


Marshall, David (Shettleston)

Sedgemore, Brian



Shaw, Jonathan


Marshall—Andrews, Robert
Sheerman, Barry


Martlew, Eric
Sheldon, Rt Hon Robert


Meacher, Rt Hon Michael
Short, Rt Hon Clare


Meale, Alan
Simpson, Alan (Nottingham S)


Merron, Gillian
Singh, Marsha


Michie, Bill (Shef'ld Heeley)
Skinner, Dennis


Miller, Andrew
Smith, Rt Hon Andrew (Oxford E)


Mitchell, Austin
Smith, Angela (Basildon)


Moonie, Dr Lewis
Smith, Rt Hon Chris (Islington S)


Moran, Ms Margaret
Smith, Miss Geraldine (Morecambe & Lunesdale)



Smith, Jacqui (Redditch)


Morgan, Rhodri (Cardiff W)
Smith, John (Glamorgan)


Morley, Elliot
Smith, Llew (Blaenau Gwent)


Morris, Ms Estelle (B'ham Yardley)
Snape, Peter


Mountford, Kali
Soley, Clive


Mullin, Chris
Southworth, Ms Helen


Murphy, Denis (Wansbeck)
Spellar, John


Naysmith, Dr Doug
Squire, Ms Rachel


O'Brien, Bill (Normanton)
Squire, Ms Rachel


O'Brien, Mike (N Warks)
Starkey, Dr Phyllis


O'Hara, Eddie
Steinberg, Gerry


Olner, Bill
Stevenson, George


O'Neill, Martin
Stewart, David (Inverness E)


Organ, Mrs Diana
Stewart, Ian (Eccles)


Palmer, Dr Nick
Stinchcombe, Paul


Pearson, Ian



Pendry, Tom



Perham, Ms Linda






Stoate, Dr Howard
Walley, Ms Joan


Strang, Rt Hon Dr Gavin
Wareing, Robert N


Stringer, Graham
Watts, David


Stuart, Ms Gisela
White, Brian


Sutcliffe, Gerry
Whitehead, Dr Alan


Taylor, Rt Hon Mrs Ann (Dewsbury)
Wicks, Malcolm


Taylor, David (NW Leics)
Williams, Rt Hon Alan (Swansea W)


Temple—Morris, Peter
Williams, Alan W (E Carmarthen)


Thomas, Gareth R (Harrow W)
Wills, Michael


Timms, Stephen
Winnick, David


Tipping, Paddy
Winterton, Ms Rosie (Doncaster C)


Touhig, Don
Wise, Audrey


Trickett, Jon
Wood, Mike


Turner, Dennis (Wolverh'ton SE)
Woolas, Phil


Turner, Dr Desmond (Kemptown)
Wray, James


Turner, Dr George (NW Norfolk)
Wright, Dr Tony (Cannock)


Twigg, Derek (Halton)



Twigg, Stephen (Enfield)
Tellers for the Ayes:


Vaz, Keith
Mr. Kevin Hughes and


Vis, Dr Rudi
Mr. Clive Betts

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31 (Questions on amendments), and agreed to.

MR. DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved,
That this House reaffirms the historic principles of the NHS, that if people are ill or injured there will be a national health service there to help, and access to it will be based on need and need alone, not on ability to pay or who their general practitioner happens to be or on where they live; welcomes the measures the Government has taken, is taking and will take that will ensure that comparable, top quality treatment and care are available in every part of the country through the introduction of new arrangements for spreading best practice, including the ending of the Conservative competition of the internal market, the introduction of local Health Improvement Programmes and Primary Care Groups to put local doctors, nurses and other health professionals in the driving seat in shaping local health care, the introduction of a new Commission for Health Improvement and National Institute for Clinical Excellence, and the creation of new legal duties of partnership and quality to ensure that all parts of the NHS and social services work together to deliver top quality services to all; welcomes the record £21 billion investment to be made in the NHS, including £18 billion for the NHS in England, over the next three years, notes the record 150,000 fall in NHS waiting lists since April 1998 and the 17 per cent increase in the number of new nurse trainees in the period since Labour came to power; and further welcomes the measures that the Government intends to take over the coming year to continue to build a modern and dependable NHS, including the extension of NHS Direct to cover 19 million people, the creation of 26 Health Action Zones covering 13 million people to target areas with particularly high levels of ill health—including cancer and heart disease—and reduce health inequalities, and the targeted investment of £30 million to modernise accident and emergency departments.

Dividend Tax Credits

Mr. David Heathcoat-Amory: I beg to move,
That this House notes that from April 1999, 300,000 non-taxpaying pensioners and 330,000 other non-taxpayers will lose an average of £75 each because of the Government's decision to abolish the dividend tax credit; further notes that 80,000 of the pensioners affected will lose over £100 per year; considers that it is unacceptable that basic rate taxpayers and higher rate taxpayers are unaffected directly by this decision which only affects non-taxpayers, half of them poor pensioners, who by definition must be poorer than taxpayers; calls on the Government to act on the promise made to the House of 30th June when the then Paymaster General stated 'I am aware of the growing anxiety among poorer non-taxpayers who have been hit by the measure so I know that we need to make our position utterly clear as quickly as possible' (Official Report, 30th June, column 175); calls upon the Government to honour now this pledge by announcing that non-taxpayers will be able to continue to reclaim a 10 per cent. tax credit from April 1999 in the same way as taxpayers who hold PEPs or ISAs will be able to do so; and further notes that this is still a 50 per cent. cut from the current 20 per cent. dividend tax credit.
The subject that we have chosen for debate has given rise to an all-party motion to correct an evident wrong—the withdrawal of dividend tax relief from the poorest savers in the country. From April this year, at least 630,000 people whose incomes are too low for them to pay tax will lose an average of £75 a year. That may well be an underestimate, because the figures that we have are four years out of date and the Treasury does not have more recent estimates.
We know that about half those people—300,000 of them—are pensioners who are, by definition, the poorest pensioners. They are about to be penalised. The purpose of the debate is to end that injustice and to get the Government, even at this late date, to think again and change their mind.

Mr. Patrick McLoughlin: I am grateful to my right hon. Friend for giving way. Would it be fair to say that those who will be affected are working-class pensioners, not middle-class pensioners? Perhaps that is why there is not much sympathy for them from the Government.

Mr. Heathcoat-Amory: My hon. Friend makes a good point. The Prime Minister's attitude is that everyone must be middle class, and those pensioners do not exist. However, we know that they do exist. They have written letters to me and my hon. Friend, and to Labour Members, complaining about the injustice. They have been left behind in the new Labour project, and it is up to the Opposition to stand up for them this evening.

Mr. Geraint Davies: Does the right hon. Gentleman agree that if he and his colleagues are sincere about helping the poorest pensioners, they would not adopt a discriminatory form of help that simply helps poor pensioners who save in a particular way—through shareholdings? Instead, perhaps he should support the idea of income guarantees, lower fuel bills and so on. Moreover, does he agree that pensioners who had that discriminatory benefit in the past have been helped by a 25 per cent. appreciation of the FTSE 100 since 2 July, when that change was made in response to the Government's global economic management?

Mr. Heathcoat-Amory: The flaw in that muddled and incoherent intervention is that those people cannot sell

their shares, as the hon. Gentleman can. They have to live on the income, and the dividends have not increased. The effective income that they get from their dividends is to be cut by an average of £75 a year from 1 April. That is the injustice that we seek to correct this evening.
The first Labour Budget in 1997 set the process in train. Its central feature, as the House will recollect, was that notorious £5 billion a year raid on pension funds. That was done by stopping pension funds reclaiming tax credits on the dividend income that they received. That was exactly what the British economy did not want at that time. It wanted more savings and less consumption. If the Government had not hit pension funds in that way, the subsequent interest rate rises later that year would not have occurred, and we would not be living with the consequences today.
That was also misconceived because the Government were, at the same time, encouraging people to get off welfare and to build up long-term savings and self-reliance, but by hitting pension funds in such a way they adopted an entirely contradictory policy. That was the wrong thing to do at the wrong time.
When they were doing that to savings institutions, the Government announced that, from 1 April 1999, they would restrict dividend tax credits to individuals—particularly and specifically by halving the rate to 10 per cent.
I remind the House that tax credits are not some lucky bonus or handout from the Government. They are designed to prevent double taxation—taxation once in the hands of the company, through corporation tax, and again in the hands of the individual saver, through income tax. Tax credits avoid such double taxation, and from 1 April they are to be halved.
That is bad enough, but, although higher-rate taxpayers will be compensated by a cut in the rate of tax on that savings income, non-taxpayers—this is the point—will not be able to reclaim tax credits, even at the new 10 per cent. rate. Uniquely, non-taxpayers are being singled out and penalised in that way.

Mrs. Angela Browning: Will my right hon. Friend give way?

Mr. Heathcoat-Amory: In a moment; I want to emphasise this point.
Taxpaying individuals and pensioners will be compensated; non-taxpaying individuals—who, by definition, are poorer—will not be compensated and will be subject to receive that penalty from 1 April.

Mrs. Browning: May I give my right hon. Friend an example involving constituents of mine? They are a married couple in their late 70s who live in Honiton, in Devon, and the wife has written to me. They spent most of their working lives working abroad for a Christian charity which, typically for that sort of organisation, did not have a pension scheme. Those people will suffer, and certainly, as non-taxpayers, they will suffer the loss of £70 a year. That is a strange way for the Government, who came into office with cries of fairness and justice, to reward people who have dedicated their lives to such work.

Mr. Deputy Speaker (Mr. Michael J. Martin): I should say at the beginning of the debate that interventions cannot become speeches. They must be brief.

Mr. Heathcoat-Amory: That intervention was well worth listening to, because my hon. Friend used a specific example to illuminate what the Government are doing. It is an eloquent commentary on the new Labour party that it is sacrificing the poorest pensioners—the poorest savers—and rewarding the better off.
We were so amazed by the announcement in 1997 that we assumed that it was a mistake. As hon. Members will remember, that year's Finance Bill was rushed through—under a guillotine motion, by inexperienced Ministers and in a few weeks. That Finance Bill contained 17 tax rises, but no one expected the Labour party to break its promise not to increase personal taxes by targeting the poorest households in the country.
During the passage of the following year's Finance Bill we raised the matter to have it looked at again. It was being dealt with by the ex-Paymaster General, the hon. Member for Coventry, North-West (Mr. Robinson). There was something particularly distasteful about him sheltering £12 million in an offshore trust in Guernsey when he was penalising the poorest households in the country.

Mr. Douglas Hogg: Was not there another distasteful aspect to what the hon. Member for Coventry, North-West (Mr. Robinson) was saying? His case was that it was possible for those people to realise their capital and re-invest it in a different form of holding. That would have made them liable to capital gains tax, when he was immune from it.

Mr. Heathcoat-Amory: My right hon. and learned Friend makes—

Mr. Deputy Speaker: Order. We should remind ourselves that, unless there is a substantive motion before us, we should not criticise other Members of the House.

Mr. Heathcoat-Amory: My right hon. and learned Friend was making a general point that Labour Members are good at putting up taxes that other people will pay but they will not pay themselves.
My hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibb) started a campaign with Age Concern, with cross-party support, to get the matter reviewed. He was successful. During the passage of the Finance Bill he argued that the matter was iniquitous. We received support from a number of Labour Members—in particular the hon. and learned Member for Dudley, North (Mr. Cranston), who is now the Solicitor-General, so that rebellion must have had official sanction.
To be fair to the ex-Paymaster General—I am sorry that he is not in his place to hear me being fair about him—he announced a retreat, saying that the matter was wrong and had to be looked at again. When the Finance Bill was on Report, he referred to a meeting between himself, my hon. Friend the Member for Bognor Regis and Littlehampton, a number of other hon. Members and Age Concern:
I think that they made a powerful case…I am sympathetic to that case.


He continued:
I am aware also of the growing anxiety among poorer non-taxpayers who have been hit by the measure, so I know that we need to make our position utterly clear as quickly as possible. I am working to that end."—[Official Report, 30 June 1998; Vol. 315, c. 174-75.]
The ex-Paymaster General conceded that those people had been hit, and he was going to do something about it. What happened after that?

Mr. Nicholas Soames: May I raise with my right hon. Friend the case of my constituent, Mr. George of East Grinstead, who—encouraged by the campaign of Age Concern and my hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibb)—wrote to me on 21 May? On 25 May I wrote to the Paymaster General to inquire on my constituent's behalf about this monstrous measure. Is my right hon. Friend aware that the reply arrived in my office on 14 January? Does not my right hon. Friend consider that to be impertinent, casual and arrogant on the part of the Treasury?

Mr. Heathcoat-Amory: I could not describe it any better.
What happened after the hon. Member for Coventry, North-West had made those concessions? He got into a lot of personal difficulties and became, in effect, a lame-duck Minister. That took the form of not answering any letters, as my hon. Friend the Member for Mid-Sussex (Mr. Soames) has shown.
That is not the worst example. Many letters written early last year have only just been replied to by the new Paymaster General, the hon. Member for Bristol, South (Dawn Primarolo), but far worse happened. On 10 December 1998, the hon. Lady, then Financial Secretary to the Treasury announced that she had reviewed the matter and there would be no change at all. The original policy to withdraw dividend tax credits from these people would go ahead.
Amazingly, the Paymaster General justified that in a press release as an attempt to boost profit retention by British companies. That was the best that she could come up with. Even if that was an attempt to justify the policy, it has not worked. According to Government figures announced in November, business investment will fall from the 8 per cent. growth of recent years to only 1 per cent. this year.
The policy has not even succeeded in boosting investment by British companies. Nor has the policy gone down at all well—as might be expected—with those affected by it. We are only just beginning to receive letters, because most taxpayers are not yet aware of what has happened. They may not even be aware of it on 1 April. It will not be until a year hence—in April of next year—when they write for their dividend tax credits and will be refused by the Inland Revenue. We are witnessing only the start of a campaign by the people affected.
However, we have received many letters. A lady wrote to us from Paignton in Devon pointing out that these sums may be small—perhaps £100 or £200 a year—but to her they represent the difference between retaining a decent style of life or not. She concludes her letter by saying:
I'm not quite sure which 'people' this 'people's government' represents but it doesn't seem to be people like me.


Another gentleman wrote to a Labour Member in Durham without success. He describes this measure as
a hidden tax on the less well off.
A gentleman from Nottingham has written to us pointing out that this is an attack on "the poorer pensioners", and that it is an insult to suggest to these people that they should take their money out of the shares they own and invest it in PEPs or ISAs. As he says, the fees and charges incurred in taking money out of one investment and putting it into another make this a wholly inappropriate course of action for the vast majority of these people.

Mr. Jonathan Sayeed: TESSAs, PEPs and ISAs are of particular benefit to upper-rate taxpayers, and are of little benefit to those who pay no tax.

Mr. Heathcoat-Amory: My hon. Friend is absolutely correct. When the Government suggest to these people that they should rush out, sell their shares and put the money into ISAs, they are telling them to invest in a savings vehicle that is untried, untested and does not yet exist. Furthermore, the fees and charges will cancel out any advantage. It is completely inappropriate advice, and I hope that the Financial Services Authority will take a close interest in any other such recommendations from Treasury Front-Bench Members.
The investors we are talking about are typically widows who inherited a few shares when their husbands died, probably instead of a good occupational pension scheme. They rely on this small annual tax repayment to live on, and they cannot, at the end of their lives, seriously be expected to take their money out and invest in a new savings plan designed for people who are saving throughout their lives. It shows what a fantasy world Treasury Ministers live in when they seriously suggest to pensioners that, at the end of their lives, they sell their shares and invest in a new Government scheme that does not yet exist.
It is not true that these people are in any way compensated by other measures, as suggested in the Government's amendment. Their amendment suggests that increases in income support will go some way towards compensating these people. They do not realize—so I shall remind them—that many of these people are above the income support level. They are below the tax threshold, but they do not receive income support, so it is irrelevant to say that income support will increase in a future Budget. That is misleading.
Some people are below or just at the income support level. This measure will force more people away from reliance on their own savings and into reliance on welfare and benefits. I thought that that was the opposite of what the Government were trying to do in their welfare reforms. They tell us that they want to get people off welfare and into self-reliance. That fact alone shows what a shambles the Government are in with their welfare reforms. They are driving more people into dependency on the state instead of reliance on their savings.
What will the Government save by this measure? What. sums will the Treasury recover? According to their own estimates, after the halving of the rate of dividend tax credits, the Treasury will get only an extra £25 million a year. Compare that with the £5 billion that they got by

raiding pension funds. That £25 million is, in effect, a tax increase, and it is targeted precisely at the least well-off. It is laser-focused at those least able to afford it. They pay no tax, so they are, by definition, the less well off, but they are the people who the Labour party has decided and confirmed will be hit as I have described.

Mr. Nicholas Winterton: On a matter of philosophy, does my right hon. Friend think that there is any justice, honour or fairness in the Government's decision? How does it meet the objectives that were expressed by the Prime Minister in his much-heralded speech last week?

Mr. Heathcoat-Amory: I think that the Prime Minister wishes that these people would go away, as they have no part in the new Labour project. They have been left behind, but not by the House. It is one of the jobs of the House of Commons to remind the Government that some people are hit, perhaps inadvertently, by Government measures. It is the job of hon. Members to highlight that problem and get something done about it.
Luckily, there is something we can do. This measure can be stopped, because some Labour Members will join us in the Division Lobby this evening. The signatories to an early-day motion that has been tabled come from all the main political parties and include 28 Labour Members. The motion before the House this evening is identical to the motion that they signed. They should start to put into practice what they preach.
Doubtless the Labour Whips have been busy. Some of the more impressionable new Labour Members of Parliament may have signed the EDM for a quick and easy press release in their local paper, or may have never stood up for any principles in their lives. That does not apply to all the 28 signatories. Some Labour Members still have principles, and they know that this is a mean, unnecessary measure. It is tax reform at its worst. We look forward to joining them in the Division Lobby at 10 o'clock.

The Paymaster General (Dawn Primarolo): I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:
notes that the fundamental reform of company taxation carried out by the Government has removed major company taxation distortions from the system and put in place a sound base for better quality investment and growth that will lead to greater prosperity for everyone in the UK, including pensioners; that the Government has taken significant steps to help pensioners, including a guaranteed minimum income for the poorest pensioners through an increase in Income Support from this April worth over £236 extra per year for single pensioners and over £377 extra for couples, a minimum guarantee on tax so that pensioners have no income tax to pay unless their income rises above a certain level, £20 of winter fuel payments for every pensioner household, the introduction of free eye tests for pensioners from this April, new travel concessions on public transport and an extra £21 billion invested in the National Health Service; and further notes that this contrasts sharply with the record of the previous Government which introduced VAT on fuel at 8% and tried to increase it to 17.5%, which introduced charges on eye tests for pensioners, which presided over the mis-selling of pensions which severely damaged the financial security of many pensioners, which ran down the National Health Service on which many pensioners rely, and which was responsible for boom and bust economics which eroded the real value of pensioners' savings through inflation exceeding 10%.'.


The debate highlights the Government's progress in two key areas of reform: reform of economic policy to encourage prosperity and growth, and reform to support those in our society who are in most need. I shall deal with a number of points made by the right hon. Member for Wells (Mr. Heathcoat-Amory). His central proposition is that, as pensioners who are non-taxpayers will lose because an alternative has not been provided, the Labour Government have not discharged their duty. That is incorrect, and I shall show why.
In May 1997, the Conservative party left us with an economy with fundamental weaknesses. [Interruption.] Conservative Members do not like hearing about that. It is interesting that they want to forget their poor growth and investment record. Inflation rose above target, and there was a productivity gap of 40 per cent. with the United States of America and 20 per cent. with France and Germany. No wonder they do no want to hear about that. No wonder they do not want to hear about a history of instability that discouraged long-term planning and investment.

Mr. Tim Loughton: rose—

Dawn Primarolo: We immediately had to set about tackling the problems that we faced. Within days we established a new monetary framework, and as soon as possible after that, we established a new fiscal framework. The country needed a platform of long-term stability, and an end to the cycle of boom and bust that has held our economy back for so many decades, against a backdrop of mounting uncertainty and instability in a global economy.

Mr. Nick Gibb: Will the Paymaster General give way?

Dawn Primarolo: I want to make progress. The hon. Gentleman will have plenty of time to speak.
One of the building blocks necessary for the creation of the economy that we need—an economy with high levels of growth and employment—is the reversal of the legacy of under-investment. The corporation tax system has an important part to play in our strategy for tackling that legacy. The system that we inherited was outdated and in need of modernisation. It involved damaging distortions, which encouraged companies to distribute their profits rather than reinvesting them for future growth and prosperity.

Mr. Gibb: Will the Paymaster General give way?

Dawn Primarolo: No, I will not. I should like to make some progress. When I have done so, I shall be happy to give way first to the hon. Member for East Worthing and Shoreham (Mr. Loughton)—who has also been trying to intervene—and then to the hon. Gentleman. In any event, he will have a chance to comment when he winds up the debate, as he presumably will.
Encouraging high levels of investment is vital if we are to break out of the cycle of boom and bust that has afflicted our economy for so long. We want a more stable and prosperous economy to benefit everyone in Britain. That is what the Opposition fail to understand or recognise. Since coming to office, the Government have

introduced an important package of measures to reform corporation tax. First, we cut both the main and the small companies rate of corporation tax by 2 per cent., in July 1997—

Mr. Sayeed: On a point of order, Mr. Deputy Speaker. The title of the motion is "Pensioners and Dividend Tax Credits". That has nothing to do with corporation tax.

Mr. Deputy Speaker: The Paymaster General is perfectly in order, because the Government amendment mentions such matters.

Dawn Primarolo: If the hon. Member for Mid-Bedfordshire (Mr. Sayeed) does not understand the context in which the reforms were made, I do not think I can help him. It just goes to show how little he recognises the devastation that his Government left behind for us to clear up.
As I was saying, we cut 2 per cent. from the small companies and main corporation tax rate in July 1997, and a further 1p in the March 1998 Budget. That means that the main rate of corporation tax will be 30 per cent., while small companies will pay just 20 per cent. The rate of corporation tax is now at its lowest level ever, and is lower than that of any of our major international competitive partners. The hon. Gentleman must understand that. He must also understand that we have given an unprecedented undertaking to guarantee the same rates for the duration of the present Parliament.

Mr. Soames: In explaining the background, will the Paymaster General explain how the loss of £800 for my constituents Mr. and Mrs. George will encourage long-term investment by companies?

Dawn Primarolo: I will answer the hon. Gentleman's question when I reach it in my speech. [Interruption.] The hon. Gentleman asked me whether I was prepared to answer the question, and I am. The answer is that his constituents were provided for, in terms of alternatives for investment. The proposition that his party seeks to advance is that there is no alternative, and that the Government have left such people high and dry. I intend to demonstrate to the hon. Gentleman and the House that is not the case.

Mr. Loughton: I am interested to note that taxing the poorest pensioners is now described as modernisation by the Government.
Will the Paymaster General give me a reference—in an election manifesto, for instance—that suggests that the last Government had anything to do with removing tax credits from the poorest pensioners? That is the point that we are debating. What has it to do with everything that the Paymaster General has come up with so far? Is she trying to pin it on the Conservative party?

Dawn Primarolo: I think that, in his impatience to intervene, the hon. Gentleman forgot the point of his intervention. I am trying to explain to him why reform of the corporation tax system was necessary for the encouragement of long-term investment, in the context of what happened to tax credits. I shall then demonstrate that


pensioners who are not taxpayers have an alternative, and that the central proposition in the motion is not sustainable.

Sir Robert Smith: Will the Paymaster General give way?

Dawn Primarolo: I will, but then I must make progress.

Sir Robert Smith: What concerns me about the line that the Paymaster General is developing is that it would have been available to the Government in June and July, when I wrote to them about the issue on behalf of a constituent. However, they were not able to produce it until January of the following year. I should have thought that the Government would have accepted that there was a serious concern to be considered, that they wanted to find a way of reforming the position, and that they failed to do so. Why can they not accept that the Opposition have a case, and deal with that case?

Dawn Primarolo: The point of my speech is to demonstrate that there is not an issue in that regard. The hon. Gentleman appears to be criticising the Government on the basis of a series of complaints, suggestions, observations and urgings for reconsideration.
Certainly, the point at issue is important. We are talking about poor pensioners. However, we subsequently reflected on the issue, and made certain that our views were correct as originally stated. That is what we are doing now. That is what I did on 10 December when I made my announcement, and that is what I am explaining to the House.
We have abolished advance corporation tax. We have solved the problem of surplus ACT once and for all, whereas the last Government could only tinker and come up with a partial solution. If Opposition Members want to talk about cutting tax credit, we can produce many quotations from the time when they were in government and pursuing a certain policy.
Earlier, the hon. Member for Mid-Bedfordshire asked about the connection with corporation tax. Here is the explanation that he sought. We have withdrawn payable tax credits for pension funds and companies, and are withdrawing them for individuals from April this year.

Mr. Gibb: Will the Paymaster General give way?

Dawn Primarolo: I have been very generous. I have given way a number of times. I wish to make some progress now; then I shall be happy to give way again. [HON. MEMBERS: "Give way."] It is not for others to tell me when I should give way; it is for me to decide. I have been very generous in taking a number of interventions, and I now wish to make progress.
The withdrawal of payable tax credits has removed the distortion that encouraged large institutional investors such as pension funds to press for higher dividends, rather than allowing companies to retain profits and reinvest in business. [Interruption.] Opposition Members do not want to hear this. They would rather shout insults than deal with the issue.
Our move has created a more level playing field for business and business decisions.

Dr. Lynne Jones: Will my hon. Friend give way?

Dawn Primarolo: I hope that my hon. Friend will give me time to make some progress, given the number who wish to speak and the fact that I need to get the Government's view on the record so that hon. Members understand the context in which the decision has been made.
Payable tax credits for individuals will be withdrawn in April. We announced the change in July 1997, giving people nearly two years to consider their investments and, if necessary, to switch them before the rules take effect. The vast majority of shareholders will be unaffected, but we have given the others time to react to the changes, and to plan to protect their income. Of course, they still have a further three months.
The House will note that the motion that the Conservative party has tabled does not call for the reintroduction of ACT. Conservative Members accept its abolition and reform, but ask for a longer period of phasing-out, so the pensioners whom they talk about will be faced with exactly the same decisions, except in the future. So Conservative Members are not saying that they want a different strategy. It is just a way in which to use pensioners and to try to make it sound as if the Government have not provided for an alternative.
I do not propose to give financial advice to anyone from the Dispatch Box. Individuals' circumstances are different and we recognise that, but the House has done all it can for small savers. We have introduced individual savings accounts, which mean that, for the first time, tax-free savings are accessible to all, not just the better off—not that Conservative Members did anything about it when they were in power, or cared about small investors and poorer pensioners who had only a small amount to invest. Did they introduce any vehicles? They did not.
It is the present Government who have made it possible for those on low incomes to have tax-free interest on bank deposits with ISAs, however small their savings. In the past, the most vulnerable savers faced the heaviest tax burden of all on their savings. We have given them that opportunity without restricting their flexibility to withdraw money if they need it.

Mr. Gibb: I am grateful to the hon. Lady for giving way at last. Does she believe that the long list of economic objectives that she has set out will be achieved by taking £25 million from 300,000 poorer pensioners?

Mr. Nicholas Winterton: That is it in a nutshell.

Dawn Primarolo: In a nutshell, the investors in question have alternatives. Again, the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb) seeks to perpetuate the suggestion that the money is to be taken away from those people and that there is no alternative. That is not true: alternatives are there. [Interruption.]

Mr. Deputy Speaker: Order. Perhaps some hon. Members could calm down.

Dawn Primarolo: It is, Mr. Deputy Speaker, because Conservative Members are so pleased to see me at the


Dispatch Box and keen to participate in my first contribution as Paymaster General. That is it in a nutshell. I can always rely on Conservative Members to assist me when I speak from the Dispatch Box.

Mr. John Bercow: Will the hon. Lady give way?

Dawn Primarolo: No. I will not give way to the hon. Gentleman.

Dr. Lynne Jones: I agree with everything that my hon. Friend has said, and the Government are right to abolish ACT. However, could the Government not institute a system that allows non-taxpayers, who, by definition, must be on low incomes, to have their dividends paid tax free? Such a system already exists for bank and building society interest, where they fill in form R85. Why could not such a system be put in place?

Dawn Primarolo: Savings vehicles are available to those investors that would enable them to invest and to get a return on their money. Again, the Opposition seek to make it sound as if there is nothing else that those people could do.

Mr. Bercow: rose—

Mr. Deputy Speaker: Order. The hon. Member for Buckingham (Mr. Bercow) keeps bobbing up and down and asking the Paymaster General to give way. It does not seem as if she wants to give way to him.

Dawn Primarolo: Within ISAs, those who invest in equities will continue to have payable tax credits for a further five years, despite the corporation tax changes. Already more than 300 providers have registered with the Inland Revenue to offer the ISAs. That will help to make them widely available and to create competition between providers. We have also introduced the CAT—cost access terms—standards, which will help to keep charges down, making ISAs potentially good value for money investments even for those on low incomes and small investors.
That is the point that Conservative Members cannot understand and will not acknowledge. Most important—[Interruption.] Conservative Members table a motion about poor investors, savers and those who are on low incomes and then will not listen to the Government's case, which demonstrates that what they say is wrong. If they are so concerned, during this part of my speech—after asking me to address the matter—they should at least let me make some progress.
Most important, for all savers, we are determined to end the cycle of boom and bust that dragged down the economy and the value of people's savings under the Conservative Government.
Our corporation tax reforms provide a framework for long-term growth. They remove a number of serious distortions from the system and enhance the competitiveness of the United Kingdom as a location for

international investment. They are good for the economy. That means that they are good for everyone, including pensioners.

Mrs. Jacqui Lait: rose—

Dawn Primarolo: I have been very generous in giving way, but I will give way to the hon. Lady and then make some progress.

Mrs. Lait: The hon. Lady is trying hard to get across the Government's policy. She says that the Government are offering an alternative to poor pensioners who save through shares. How much would she expect a poor pensioner to have to pay in charges to sell the shares? How much capital gains tax would the poorer pensioner be liable for? How much would the charges be to buy a PEP, TESSA or ISA?

Dawn Primarolo: The hon. Lady will know that it depends on which particular services are used, but as she will also acknowledge—presumably, she supports the Government's policy—by the use of the CAT standards and by increasing competition in the market, we are driving down those charges.

Several hon. Members: rose—

Dawn Primarolo: I have taken eight interventions. I should like to make a little more progress.
Under the Government, pensioners are better off. They have been better off since the Government took office and are certainly better off since we announced our corporation tax reforms in July 1997. As Conservative Members obviously want to be reminded of the good things that the Government have done, let me go through a few of them.

Mr. Geraint Davies: Will my hon. Friend give way?

Dawn Primarolo: I will not, if my hon. Friend will forgive me.
In the comprehensive spending review, we announced a £2.5 billion package of support for pensioners. I say to each pensioner: the Government care for pensioners and for the poorest pensioners. The right hon. Member for Wells sought to ridicule the changes to increase income support for those in most need: an extra £236 for a single pensioner and £377 for a couple. Those increases are three times the increase due under the normal uprating.
It was the Conservative party that ended free eye tests and that now tries to masquerade as a supporter of poor pensioners; it did not worry about them when it abolished free eye tests. It was the Conservative party that put value added tax on fuel and tried to raise it to 17.5 per cent. Its concern for poor pensioners did not exist at that stage. Obviously, it has found it only in opposition.
We are introducing a programme to ensure that people can claim the benefits to which they are entitled. Millions of pensioners are not getting what they are entitled to. When in government, the Conservative party did nothing about that. Conservative Members now have the cheek to tell us that they care for poor pensioners.
This winter and last winter, we gave each pensioner household a £20 winter fuel payment, with a £50 payment to those in most need. Along with the cut in VAT and other measures that we have taken, pensioner households benefit by an average £108—it is £140 for the poorest. We are also investing £500 million over the next three years to continue with the provision of winter fuel payments. We reversed the previous Government's decision to charge for eye tests. Conservative Members would not support us or congratulate us on that, or say that it will help poor pensioners. They abolished free eye tests, but we restored them.
The NHS is particularly important for pensioners. In our first two years in office, we are investing an extra £2.25 billion in the NHS. We also plan to deal with our inheritance from the Tories.
Here are the facts: help on fuel; minimum income guarantees—

Mr. Soames: On a point of order, Mr. Deputy Speaker. I wonder if you could help my constituents, who look to Parliament to protect their rights. How are they to get a truthful answer to the question of how having £800 taken from them will make them better off? How am I to get an answer to that question, Mr. Deputy Speaker?

Mr. Deputy Speaker: I am quite sure that the hon. Gentleman knows how to help his constituents, and that he knows his way around the House. It is not a matter for the occupant of the Chair.

Dawn Primarolo: The hon. Member for Mid-Sussex (Mr. Soames) can help his constituents by understanding the changes that the Government have made and by explaining them properly to his constituents, rather than by building on his constituents' concerns and fears about losing money. He should explain to them the alternatives.
The Government have provided more investment in the NHS, and free eye tests. Those measures will help to ensure that pensioners have higher spending power and a better standard of living. Conservative Members failed to implement those measures when they were in government.
The Government's programme does not stop at helping today's pensioners, because we care also about tomorrow's pensioners. Conservative Members did not worry about those pensioners when they presided over the pensions mis-selling scandal. This Government tackled that problem and are fighting for pension security. My hon. Friend the Economic Secretary to the Treasury continues to work closely with the pensions industry, making more progress on the matter than was ever made by the previous Government.

Mr. Steve Webb: Will the Paymaster General give way?

Dawn Primarolo: I shall not give way to the hon. Gentleman. I have spoken for a considerable time and have given way nine times, and many hon. Members wish to speak. The hon. Gentleman should respect that.

Mr. Bercow: Will the hon. Lady give way?

Dawn Primarolo: Much as I am tempted to give way, the answer is no.
In December, the Government announced another major plank of their welfare reform package—the Green Paper, "Partnership in Pensions". The Government are about helping tomorrow's pensioners and protecting today's pensioners, and about examining retirement issues and ensuring that there is security in retirement. That is good news for pensioners.
Conservative Members' record on helping pensioners shows that they have no right to try to lecture the Government on caring for the poor. They failed today's pensioners, and they failed tomorrow's pensioners. They spent years not addressing the issues. They put VAT on heating after promising not to, and they did not help to solve the pensions mis-selling scandal. The Tories wrongly encouraged people to opt out of occupational pensions into private personal pension plans, and failed to take action to compensate victims of pensions mis-selling.
Conservative Members do not know what it is to keep a promise, and they are angry that the Government are delivering on our promises. I tell my hon. Friends that the Opposition motion is about using pensioners, frightening people and failing to explain what they know to be the case—there are alternatives, and people's income can be protected. I urge my hon. Friends to reject the Opposition motion and to support the Government amendment.

Mr. Edward Davey: I congratulate the Paymaster General on her promotion—which she may not have expected. Other than the Chancellor, she is now the only Minister who has been at the Treasury since abolishing the tax credit was first proposed to the House. I hoped that, today, the Paymaster General would offer a better defence of the proposal. However, she failed to answer any of the substantive questions asked by Opposition Members—specifically that asked by the hon. Member for Beckenham (Mrs. Lait)—which is deeply to be regretted.
I congratulate the official Opposition on their motion, which has the support of myself and other Liberal Democrat Members. For many months, we have supported and worked on the issue with Conservative Members. I pay credit specifically to the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb), who has worked with my hon. Friend the Member for Twickenham (Dr. Cable), to create a cross-party alliance. We have been pleased also that some Labour Members have supported us in our early-day motion. In Committee, we all remember the brief but pertinent and very effective—or so we thought—intervention made by the hon. and learned Member for Dudley, North (Mr. Cranston), the new Solicitor-General, who has gone on to higher things. We had hoped that he would use his influence to express his concern about the poorest pensioners, but, regrettably, that has not happened.
I welcome this debate because it gives the Opposition an opportunity to expose the Government's soundbite politics, which overwhelms substantial politics. The Prime Minister was at it again this weekend, in the News of the World, when he said:
This is your Government, living in your world, with your priorities.
He applied the usual Government spin about the Government's minimum income guarantee for pensioners, which is an Arthur Daley guarantee and is not worth the paper it is not written on.
The Government's real policies take money from pensioners. Moreover, the minimum income guarantee will not protect any of the pensioners whom we are considering in this debate, as most of them will have savings above £8,000 from which they gain their dividend income. They will not be eligible for the income support increases mentioned by Ministers. Those pensioners, therefore, will be affected but not protected by the Government's policy. The Paymaster General shakes her head. I should be grateful if she would intervene on that substantive point. I should like her also to deal with it in her reply. Opposition Members are concerned that those pensioners will be affected and that they will be offered absolutely no protection.
I welcome the Government's amendment, as it enables us to refer back to last week's Opposition day debate initiated by Liberal Democrat Members. In that debate, we demonstrated that the Government's NHS policy would not help pensioners as Ministers claimed it would. Ministers go on and on about the £21 billion that the policy will provide for the NHS—but Liberal Democrat Members demonstrated in last week's debate that if the year-on-year increases made by the previous Government were projected over this Parliament, the current Government will, by the fifth year of this Parliament, have produced only £1 billion extra for the NHS. That is the extent of the Government's commitment to the NHS and to the pensioners who use it. Over five years, the figure is £1 billion, not £21 billion; it is a total nonsense and fabrication. I am therefore glad that the Government have tabled their amendment, so that we can again demonstrate that that figure is a complete fabrication.
There is a long history to the debate on the issue, with which the House has dealt on many occasions. As I said, Liberal Democrat Members have developed a co-operative approach. When the issue was first debated, on 22 July 1997, in the Standing Committee considering the Finance (No. 2) Bill, I joined the hon. Members for Daventry (Mr. Boswell) and for Ashford (Mr. Green) in warning Ministers about the effect of their proposals. As the right hon. Member for Wells (Mr. Heathcoat-Amory) pointed out today, the measure was being guillotined and rushed through. However, we gave Ministers the benefit of the doubt.
In Committee, the hon. Member for Ashford and I pointed out that the Government had perhaps made a mistake, and suggested that they probably did not intend to hit the poorest pensioners. We gave them a chance to make amends. Unfortunately, Ministers were in a fairly belligerent and arrogant mood, and they told us that we were lecturing them. The Government, of course, take lectures from no one, as they keep reminding us. Nevertheless, it was a shame that they did not listen to us, because we were pointing out that an issue of social justice was involved. I thought they were supposed to care about such issues. I hoped that Ministers would listen to us, rather than respond as the then Economic Secretary did.

Mr. Webb: The Paymaster General mentioned pensions fraud when talking about social justice. Surely one of the biggest pensions frauds of recent years was the raiding of the pension fund of the bus employees, who are now pensioners. Will my hon. Friend join me in calling

on the Treasury to make a clear statement that it will not block attempts to get justice for those pensioners, as reported in The Guardian today?

Mr. Davey: I am grateful for that intervention because it shows one of the problems with the Government. One Minister is warring with another and they cannot make up their minds. That is what happened in this case. The previous Paymaster General said that he would review it and made promises to the House of Commons, but other Ministers did not follow through on that. The Deputy Prime Minister was clearly trying to bat for the bus employees, but he has been blocked by the Treasury.
After the initial debate in Committee on dividend tax credits on 22 July, the issue came back to the House on Report on 29 July, but we got no movement from the Government. It was then raised in Committee on 14 May 1998 as a result of initiatives by the hon. Member for Bognor Regis and Littlehampton. The Liberal Democrats supported him, with effective speeches coming from my hon. Friends the Members for Twickenham and for Torridge and West Devon (Mr. Burnett). I warned the Government that:
We are talking about the most disadvantaged and vulnerable elderly people in our constituencies. Do Labour Members really want to impose a savage tax increase on those people?
The good news was that we got a sign of movement. A professor—the hon. and learned Member for Dudley, North—said that the Government should look again at the issue. He seemed to have some influence with the then Paymaster General. Those of us who were on the Committee remember the discussions that they had on the Back Bench, seemingly stitching something up. We got the first glimpse of light from the Paymaster General when he said:
Perhaps a case can be made for an overall limit on payable tax credits, which might be in the region that Age Concern described in its very good paper. That is not a promise; it is merely a promise to revert".—[Official Report, Standing Committee E, 14 May 1998; c. 190-94.]
When we reverted to the issue on Report on 30 June 1998, the hon. Member for Bognor Regis and Littlehampton tabled a new clause. The debate brought forth another delphic pledge from the former Paymaster General. He said:
I am also aware of the growing anxiety among poorer non-taxpayers who have been hit by the measure.
He added:
We are looking at alternatives".—[Official Report, 30 June 1998; Vol. 315, c. 175.]
He did not make a promise—he was clear about that—but we felt that a nod was as good as a wink with him. We were hopeful that the review that he announced would produce something of substance. We were encouraged when Labour Back Benchers joined forces with Conservatives and Liberal Democrats on early-day motion 56, which gained more than 20 Labour signatures. Some of those Labour Members are present tonight. We have heard from the hon. Member for Birmingham, Selly Oak (Dr. Jones). I see the hon. Member for Stroud (Mr. Drew) here as well, who also signed the early-day motion.
It looked as though we were building up a head of steam, but there was continual delay and equivocation. Although we were pressing the Government in private


meetings and letters—my hon. Friend the Member for Twickenham sent a letter to the Prime Minister on 25 November—we were getting no response.
My right hon. Friend the Member for Yeovil (Mr. Ashdown) asked the Prime Minister about the issue at Prime Minister's Question Time on 9 December. That seemed to prise out an answer. The answer to my hon. Friend the Member for Twickenham from the then Financial Secretary appeared on 10 December. As the right hon. Member for Wells said, that answer was brief and continued the discredited arguments that the Government had used in the past—that the removal of the tax credit was somehow about removing distortions and that alternative savings vehicles were acceptable and equivalent.
That answer broke the pledges that we felt we had secured. It went back on what pensioners thought the Government were doing. The Paymaster General said tonight that the Government had given pensioners a good deal of notice so that they could change their affairs, but then they set up a review. There was uncertainty about the Government's policy; only on 10 December was it made clear. In effect, there is only three or four months warning.

Mr. Geraint Davies: I seek confirmation of the Liberal Democrats' position. Is it simply to extend the 10 per cent. tax credit—which is already available to the group that we are talking about for five years under individual savings accounts—to beyond five years? Is that the extent of their great new policy?

Mr. Davey: Opposition Members would like to return to the situation before the 1997 Budget.
The Government's arguments do not bear analysis. Their first argument is that no one need lose because everyone can change to the new ISAs, which we have not yet seen. Ministers are not living in the real world, despite the Prime Minister's comments that the Government are pursuing the policies of the real world. I do not know whether the Paymaster General's elderly constituents in Bristol, South are sophisticated financial savers, but many of my constituents who come to me want help with council tax benefit forms or housing benefit forms. The forms worry them. My grandmother is 82, going on 83. She has osteoporosis and is partially sighted. She seeks my help just to pay her utility bills. Many elderly people cannot cope with the financial transactions required to make such shifts in their savings.
I was interested to read a report from the Chartered Institute of Taxation's low incomes tax reform group, published in December last year.

Mr. Barry Gardiner: I have two brief questions. First, given the hon. Gentleman's remarks about the Liberal Democrats' preference for reverting to the previous situation, what would he do with advance corporation tax? Secondly, if people over the age of 60 are incapable of filling in forms, how do they reclaim their tax credits?

Mr. Davey: We have spoken to many groups—particularly the Chartered Institute of Taxation—which

have said that they are more than happy to work with the Government and all parties in the House to produce a result that will protect the people about whom I am talking and would allow the Government's major policy to go forward. The former Paymaster General was having such discussions with hon. Members. I cannot accept the hon. Gentleman's point on that.
Many people have problems filling in forms. Clearly, some are able to claim the tax credit because they have been doing it for some years. The point is that they have got used to it. Many people do not benefit from the tax credit because they cannot fill in the forms. The hon. Gentleman's point does not follow through.
I recommend that the hon. Gentleman reads the report from the Chartered Institute of Taxation, which chose to study the taxation position of older taxpayers first among low income groups, because there are particular problems for that group. They have practical difficulties with filling in forms. They are not at work, so they have no payroll department from which to get advice. Many of them are not mobile, so they cannot go to tax offices for advice. The Inland Revenue's standard response is that it has free telephone lines. Many elderly people are hard of hearing. The report refers to the estimate of the Royal National Institute for Deaf People that 55 per cent. of people over 60 are deaf or hard of hearing, making telephone communication difficult, while 570,000 have severe or profound deafness that may need communication by text phone or video phone, which very few of them have. As well as having difficulty with mobility or hearing, some of those people are partially sighted.

Mr. Desmond Swayne: The hon. Gentleman will be aware that the Paymaster General pointed out that as a consequence of the Government's policy—the quid pro quo of taking away the tax concession—pensioners at least have the benefit of free eye tests.

Mr. Davey: I am grateful for the hon. Gentleman's intervention, but he will agree that those free eye tests do not make up for the loss of the tax credit.
Ordinary people who will be hit by this measure face difficulties in filling in tax returns. The Royal National Institute for the Blind reported that, in 1996, there were estimated to be about 950,000 people in the UK over 60 suffering from blindness or partial-sightedness—making it difficult for them to follow the tax guidance or fill in the forms.

Mr. Geraint Davies: It follows from what the hon. Gentleman is saying that owing to the many disabilities of the more mature people in our population, there should never be any changes to tax regulations on the basis that a change could not be understood by people who are becoming chronically deaf or blind.

Mr. Davey: That is not the logical consequence of what I am saying. The Government say that those people can move their savings that are currently held in shares into new savings schemes. My point is that, in the real world, it will be difficult for some of them, as they are not avid followers of the financial pages.

Mr. Michael Jack: Is the hon. Gentleman aware of the previous Government's attempt to address


this very problem with the tax back campaign, which attempted to return to exactly the group of people whom the hon. Gentleman is describing some £560 million by means of national advertising and freephone telephone numbers? Does that not support the very point that he is making?

Mr. Davey: Yes. However, it is a shame that the previous Government took so long to get rid of composite rates on building societies. When they were abolished, that campaign was launched. Liberal Democrats had pressed the previous Government to get rid of that composite rate of tax for many years, but it took them a long time to get around to it. We welcomed it when they did do it.
My first point—[HON. MEMBERS: "First?"] The first point in this part of my speech concerns the proposed alternatives. For many people, these are not practical.

Mrs. Theresa May: Will the hon. Gentleman give way?

Mr. Davey: If the hon. Lady does not mind, I want to make progress. Ministers are clearly worried that I am taking up a lot of time, and I apologise for that.
The Government's solution of people moving to ISAs will not work—this follows on from the point made by the hon. Member for Beckenham. The charges on joining an ISA are likely to be substantial. Even with the cost access terms standard and other simple schemes, according to the Age Concern briefing that I was given before the debate the charges are likely to more than outweigh the tax credit.
The cost of holding investments in an ISA is estimated at around 0.5 per cent. of the value of the shares in the ISA. The value of the shares that would have produced a tax credit of £75 per year for non-taxpaying pensioners would have been about £12,500, using the Treasury's estimates of the income from such shares. That means that holding those shares in an ISA would cost £62.50 per year. When the estimated start-up costs for an ISA of £125 are added, it becomes clear that the cost of transferring and holding investments in an ISA for those low-income pensioners will be more than the tax credit. The Government's argument that those pensioners need not lose out and will remain protected is simply wrong in fact and in practical reality.
Another argument in the parliamentary answer of 10 December is that the tax credit is a distortion and has to be abolished. That was debatable, but let us be charitable. Let us agree that, overall, the ACT system was distortive, pushing firms into higher dividend policies and away from retaining profits for growth. Let us accept that as a hypothesis.
The question for this debate is whether retaining the tax credit for 630,000 non-taxpayers keeps that distortion. That argument defies credibility. It is one thing to say that major pension funds demand higher dividends because of the tax system and can exercise influence on a firm's financial policies; it is quite another to say that children and the elderly—who make up most of those 630,000 people—will be so influential as to force firms to alter their financial planning. What percentage of UK plc is held by those 630,000 non-taxpayers?
The Government seem to think that chief executives and boards across the country are quaking at the thought of Aunt Agatha and her friends complaining that too much profit is being retained by the company. That is a total nonsense. The Government's answer on 10 December was a disgrace and showed that they have lost the argument. Ministers are trying to avoid that point and are saying that their generosity elsewhere to pensioners makes up the difference. The reality—as the motion makes clear in relation to other policies—is that it clearly does not.
I wish to refer to the minimum pension guarantee. A constituent phoned me this morning because she had read the article by the Prime Minister in the News of the World yesterday. She had read about the minimum pension guarantee and wanted to know whether her pension would go up. I asked her a few questions, and it was clear that it would not. The minimum pension guarantee refers to increases in income support, for which she is not eligible. We know that more than 1.1 million pensioners are eligible for income support but do not claim it, and almost 500,000 of those are women over the age of 75. Those pensioners are losing an average of £15 a week—or £780 a year. Another 600,000 pensioners' incomes fall below the income support level, but their small savings—perhaps just over £8,000—prevent them from benefiting from income support and from the Government's proposed minimum income guarantee. The minimum income guarantee will not help those people to offset the tax rise.
We welcome the Government's attempts and measures to improve the take-up of income support and we hope they work. However, why in the meantime are the Government taking away an average of £75 from many of the same pensioners—£75 which is taken up and which is extremely important? The policy goes against the Government's stated aims—aims which are far from being realised.
The other policy that the Government have pushed tonight is the winter fuel payment. This is a gimmick of a policy, and we should look at how much it is costing in bureaucracy. My hon. Friend the Member for Northavon (Mr. Webb), with his usual forensic skills, has shown in questions to Social Security Ministers that by paying for the scheme in a one-off payment of £20—rather than a simple 40p a week on the basic pension—the extra bureaucracy is costing £12 million. On top of that, there is the need to spend £1.7 million to advertise the winter fuel payments. In other words, £14 million has been wasted on bureaucracy and advertising when restoring the tax credit would cost about £25 million. That shows the extent of the Government's support for pensioners and their priorities. The Government have mentioned free eye tests and concessionary fares, and we support those policies—we were the first to propose them.
The Government talk about tax guarantees, but no one knows what the Chancellor means. On 14 July, when he published the comprehensive spending review, he said:
We shall also set a tax guarantee that no pensioner will pay income tax unless their income rises above a specified level."— [Official Report, 14 July 1998; Vol. 316, c. 193.]
That sounds excellent—but unless I have missed them, no details have been announced, not even in the


"Partnership for Pensions" Green Paper before Christmas. In December, the Chartered Institute of Taxation's low incomes tax reform group commented:
Mr. Brown provided no further explanation but presumably he meant something more than retaining the existing system of allowances at current levels, otherwise the undertaking would have been meaningless.
We all know that the Chancellor is the man of substance in the Government, so we eagerly await an explanation of his meaning about the tax guarantee. I hope that a Treasury Minister will enlighten us about that today. Otherwise, we suspect that the guarantee is meaningless.
I recommend to Ministers an idea proposed by the Chartered Institute of Taxation. It argues cogently for a new system of tax exemption certificates, granted every four years, which would be a pensioner's response to every Inland Revenue tax form and could perhaps become the embodiment of what the Chancellor means by a tax guarantee. Such a system would save a lot of heartache and worry among elderly people.
I want to be constructive and to propose prudent and effective policies to help the poorest pensioners. Liberal Democrats have suggested an increased and expanded age addition to the basic pension. We believe that we must support the elderly and give them dignity in retirement. We suggest an extra £3 a week for those over 75 and an extra £5 a week for those over 80, which would be taken up as all pensioners over 75 would benefit. That would put an end to the insulting extra 25p a week now given to those over 80.
The Government must start tackling poverty among pensioners. Labour should stop the new tax rise for pensioners and increase pensions, giving priority to those most in need.

Mr. Eddie O'Hara: As Labour co-chairman of the all-party group on aging and older people, and a co-signatory of the early-day motion that has been referred to, I feel that I must contribute to this debate. That early-day motion was tabled before we had the promised clarification by the Paymaster General. It asked for that clarification and, naturally, requested an outcome in accordance with the reasons for seeking a review in the first place.
The Opposition motion is, rather lazily, based on that early-day motion, the signatories to which may not be happy to be associated with an attack on the Government for their decision, after the event. But I make no complaint about that: it is all part of the robust style of debate in the House, in which all parties indulge on different occasions.
I shall not indulge in point scoring or political embarrassment, but I once again make a reasoned appeal to the Government on this matter. I wrote to my hon. Friend the Paymaster General after the clarification was announced in December. Will the Government, even at this late stage, consider the point that, as the tax credit will remain payable in respect of dividends paid on investment in ISAs and PEPs until 2004, and for up to seven years for charities, it does not seem logical that it cannot be paid to UK resident non-taxpayers during that same period?
It is only non-taxpayers who lose income because of the decision. In July 1997, the Inland Revenue even went to the extent of ensuring that higher-rate taxpayers did not suffer as a result of the reduction of the tax credit to 10 per cent. Non-taxpayers—those on the lowest incomes, as has fairly been pointed out—-will lose income from April 1999. That does not make logical sense to me.
Two thirds of pensioners pay no tax, so tax-free savings are an inappropriate and unnecessary compensatory mechanism for them. The cost implications of transferring investment to ISAs are liable to outweigh any benefit from retaining the 10 per cent. tax credit, because the start-up costs are so great and there are limits on how much can be transferred into an ISA in any one year.
I hear the arguments about the macro-economic benefits to the Treasury accruing from the adjustments to advance corporation tax, and the arguments that have been rehearsed many times by my hon. Friend the Paymaster General about the alternative shelters for investments, but I ask the Treasury to consider the puny £25 million that it would cost to restore the tax credit facility for non-taxpayers, as against the £5.4 billion accruing to the Treasury from the overall adjustments to tax credits.
I ask the Treasury, even at this late stage, to consider the fact that some old people manage their own investments. I hear what my hon. Friend the Member for Croydon, Central (Mr. Davies) said about people being senile, deaf and blind, but there are old people in the real world who manage their own investments and may not be able or disposed to reorder their investments into ISAs as has been suggested, which may in any case not even be cost-effective.
I urge the Government to consider whether UK resident non-taxpayers should be able to continue to claim the reduced tax credit of 10 per cent. on their investment income after 6 April 1999. As a minimum, they should be allowed to claim the tax credit until 2004, when it will be phased out for PEPs and ISAs, or until 2006, when it will be phased out for charities.
In all friendship and reason, at this late stage, I make that appeal to the Government. Whatever the outcome of this debate, I shall continue to appeal to their reason, good will and generosity of spirit on this matter.

Mr. Michael Jack: I congratulate the hon. Member for Knowsley, South (Mr. O'Hara) on a brave and principled speech. He has thought through his arguments carefully and put them before the House with clarity. He made a telling point at the end of his speech, reminding us that this is certainly not the last drop saloon for this issue. If the Government are unmoved to change their mind, even at this late stage, as he said, there will still be an opportunity for the matter to be revisited on each and every Finance Bill of this Parliament, as we attempt to change the Treasury's view.
I was planning to make a very short speech, but I have to respond to one or two of the Paymaster General's comments. It was sad that she was not prepared to face the music of financial analysis; otherwise, I would have reminded her that, when I held the post that she held until recently—Financial Secretary—I considered the differences between classical corporation tax systems and those such as ours, based on the imputation system.
Many of the arguments now made in strict economic terms to justify the change simply did not stand up, according to the arguments of the Treasury officials: the same officials who now advise the Government. They pointed out to me that the biggest single economy in the world that works on a classical corporation tax system—that of the United States—has a higher level of distributed profits than the United Kingdom economy.
It is a bizarre idea that, by recreating a classical system in this country, there will be a magical improvement in economic activity. That is for the birds. The former Secretary of State for Trade and Industry, the right hon. Member for Hartlepool (Mr. Mandelson), made many trips to the United States to learn how it was that that economy was so vibrant and healthy in terms of growth and job creation—in short, how it managed to do exactly what Treasury Ministers claim will be achieved by the Government's policies to change the tax system. In economic terms, the Government's arguments do not add up.
The second charge made by the former Financial Secretary was that the previous Conservative Government did nothing to support savers. I remind Ministers that one of our best achievements was to change the tax system so that many pensioners became non-taxpayers—one reason for our being here tonight. We also worked hard on TESSAs and PEPs, and we did much to help saving and the ethic of saving in this country.
However, I shall focus on some of the wider consequences of the change. We have talked about its impact on pensioners, and the Government have argued that people can make compensatory adjustments to their financial position and income flow. I have studied a group of institutions that find it incredibly difficult to make such adjustments, but whose investments service the needs of their pensioners.
I started with the Church of England, and the Economic Secretary might be interested to know that, in answer to a question from me, the hon. Member for Middlesbrough (Mr. Bell), in his role as Second Church Estates Commissioner, representing the Church Commissioners, said:
At their 1997 dividend levels, the Commissioners estimate that the removal of payable tax credits will ultimately reduce their income and their total investment returns by £12 million annually.
Each and every year, therefore, the Church of England will have to find another £12 million. Grossing up that figure to include other Churches, I estimate that this country's Churches, all of which have a responsibility for former clergy, will be about £40 million down as a result of this mean-minded measure.
A closer examination of the effect on Church pension funds of the change reveals that, again according to the hon. Member for Middlesbrough, it
will also reduce returns on the newly established contributory pensions scheme, which meets pension liabilities for service from 1998 onwards, which is administered by the Church of England Pensions Board."—[Official Report, 7 December 1998; Vol. 322, c. 53.]
Will the Economic Secretary say how the Church of England is supposed to extract from the already limited money in its Sunday morning collection plates an extra £12 million every year? It cannot adapt to those conditions easily, but perhaps the Minister believes that the widow's mite will make up for the Treasury's meanness.
I also checked the effect of the policy on other Churches. For the Roman Catholics, Monsignor John Moore said a submission to the Treasury had been made to point out the folly of its ways—perhaps the Catholics hoped that a sinner would repent, even at such a late hour. However, Monsignor Moore said the measure would cause a "considerable loss" for his Church's pension funds.
It is clear that the entire Christian community will stack up against the policy, but the effect is not limited to the Christian Churches. Those who are of the Jewish persuasion are already employing actuarial experts to work out the impact for them. Fundraising in these areas is most difficult, yet the Government have decided to hit them hard.
Finally, the effects go beyond what will be felt by the Churches and there will be a substantial impact in the world of charity. The Government talk about looking after the least well off and those deserving of help, but the Treasury received a collective submission from the charities which pointed out that the effect of removing the payable tax credits was a reduction in resources of about £400 million a year. The charities calculated that that was equivalent, given their annual turnover of £12 billion, to a total cut of 3 per cent. and that it doubles the amount already taken through the irrecoverable VAT inputs.
That is a fine record for a Labour Government in regard to those groups that are least able to do anything about their income. Such groups try to help the worst off in society, and give comfort and succour to those in need. The reward that they get is that the Government take away their money.

Mr. Ian Pearson: I begin by welcoming my hon. Friend the Paymaster General to her post. Although she is not at present in the Chamber, I know that in the past she has shouldered much of the burden of Finance Bills: her hard work means that she deserves her promotion.
The Government are right to abolish advance corporation tax and foreign income dividends, and to phase out dividend tax credits. I must resist the temptation to engage in economic debate with the right hon. Member for Fylde (Mr. Jack), but I am persuaded that a modern corporation tax system with in-year payments will remove previous distortions in the market. In the long run, it will lead to greater investment in British business.
The Conservative Government broke the link between pensions and earnings. They were also responsible for pensions mis-selling and for taking away free eye tests. Until the Labour Opposition stopped them, they would have doubled VAT on fuel as well. It is a bit rich, therefore, for Conservative Members to argue that they are standing up for the rights of pensioners. Already, after only 20 months in office, it is clear that this Labour Government care for pensioners and want to do something practical to help the poorest pensioners in our society. The minimum income guarantee for pensioners, lower fuel bills, the state second pension and stakeholder pensions—all those initiatives show that Labour are delivering on election promises.
The facts in the debate are a little out of date but not seriously in dispute. About 300,000 non-taxpaying pensioners receive a dividend credit of about


£75 on average. That average implies a saving fund of about £12,500. Pensioners probably will have got their money through a building society demutualisation, or through investments in one or two privatisations whose shares they have kept as savings in their own accounts. About 160,000 non-taxpaying pensioners have a dividend tax credit of £50 or less.
Does it matter? I suggest that the average of £75 per year that the non-taxpaying pensioners will lose is significant.

Mr. Robert Syms: Will the hon. Gentleman give way?

Mr. Pearson: In a minute. The minimum income guarantee is of £75 a week for a single pensioner, so we are talking about a loss equivalent to one week's earnings for a poor pensioner. That is an important amount for people on low incomes and we need to think carefully about what to do about it.

Mr. Syms: No doubt the hon. Gentleman has received letters from pensioners complaining about the change. In his replies to them, has he called the change insignificant?

Mr. Pearson: The hon. Gentleman must have misheard me. I said that the change is significant and that the Government must consider what to do about it. I listened to my hon. Friend the Paymaster General with great interest when she talked about alternative saving vehicles. The ones that exist are relatively straightforward. At present, they are either PEPs or TESSAs, which in the future will become ISAs. It is clear that, in relation to a fund size of £12,500, the average costs of management charges at 0.5 per cent. will more than swallow the benefits to be gained by sheltering half the dividend tax credit in one of the new ISAs.
The Government appear to be saying that small shareholdings of £12,500 are not appropriate for people on low incomes and that they would be better placed as individuals getting tax relief by putting their money in a building society or some other savings vehicle, because they can at least claim the tax benefit from doing so, whereas if they invest in the equity market, they cannot. I am not sure that that is a message that we should be sending to poor non-taxpaying pensioners, but it appears to be the logical conclusion to draw from the Government's actions.
I am worried that, despite the many Government actions to help pensioners, the measures that we are debating will appear to many pensioners to be mean-minded and unfair. The issue will not go away and the Government should reconsider.

Mr. Howard Flight: Albeit in her absence, I congratulate the Paymaster General on her promotion. I sympathise with her attempts to defend that which most hon. Members believe to be quite indefensible. I shall refer to the arguments she used, but it must be said that there can be no justification for worsening the position of those who, by definition, are badly off, for they do not pay tax. By removing what

small income they receive, the position of those pensioners is worsened relative to most other pensioners. All pensioners receive a fuel allowance, but the pensioners affected by the measure—those who have capital—will not benefit from income support. My constituency contains many such pensioners—people who never had an occupational pension, who spent their careers about the world and who have retired to my area. Many of them are not well off and fall into the category of pensioners who are affected by the measure.
I cannot understand the justification for the abolition of advance corporation tax—-the whole argument is totally bogus. Everyone knows that the change was made to increase tax revenue by £5 billion per annum, at the expense of pension funds. Every economist knows that it is nonsense to argue that investment increases if the money is left with companies rather than distributed, and if the market is left to decide how it is to be reinvested. The result of the changes is that the savings rate has fallen from 10.4 per cent. to 7.2 per cent. As everyone knows, in the long term, investment is a function of savings; therefore, as the savings rate in this country falls, so does investment. Smokescreens and distortions have been thrown around what is essentially a tax-gathering change; and in an obscure little area, in a mean and doctrinaire measure, a tax credit benefiting a particular category of not-well-off pensioner that cost only £25 million per annum has been abolished.
The reason why the Government have refused to give way is not administrative—as we know, form R85 could deal perfectly easily with the situation. They refuse because the sort of elderly person who has a few shares does not appeal to the Government—they do not see such pensioners as their supporters and cannot derive from doing something for such pensioners the sort of propaganda hype that can be spun from winter fuel payments and alleged income guarantees. The pensioners who are affected by the Government's changes are independent people, self-respecting, often elderly widows—-not the sort of people who fit into the Government's preferred role model. The Government believe that they are not worth bothering about, even though the cost of helping them would be minuscule.
I cannot understand how a Government headed by a Prime Minister who claims that a fair society is a priority can do such a thing. I cannot understand how the Paymaster General could have believed any of what she said this evening. I call on the Government to get over their pride, and end a policy that is hugely unfair and that falls on those who are least able to afford it in their old age. It makes nonsense of everything the Government claim to stand for to do something like that.

Ms Ruth Kelly: I have recently had occasion to reflect on the subject of the debate and find it astonishing that the Opposition should have chosen the Government's actions in respect of pensioners as their line of attack. As my hon. Friend the Paymaster General said, the Opposition do not have an honourable record on the subject. To call themselves the friends of the pensioner, when the Conservative Government were involved in the huge pensions mis-selling scandal in which 600,000 people at or near retirement were mis-sold pensions, is a bit rich. However, I shall do them the courtesy of concentrating my arguments tonight specifically on the


rationale behind the abolition of tax credits on dividends and on the Labour Government's overall strategy on the economy and pensioners.
Let me start with the tragedy of the persistent under-investment that has afflicted the British economy. Too often, British companies have invested too little, too late in the economic cycle. One does not have to look far to see some of the reasons: the pattern of booms and busts, intensified during 18 years of Tory rule; economic uncertainty; and inflation gripping the system. Another less-noticed reason—albeit not an obscure little area, as the hon. Member for Arundel and South Downs (Mr. Flight) put it—was the desperately outdated tax system. That system meant that pension funds—the most important investor group—stood to gain more if the company paid out a dividend than if it retained or invested its profits; and, as dividends were tax exempt, the funds could claim back the tax, all of which caused a major economic distortion.
As the professor of finance, Janette Rutterford, wrote in The Guardian in June 1997, shortly before the Budget changes:
No wonder that UK companies top the global dividend yield tables. The corporate tax system positively encourages pay-outs. The solution is to remove the refund for tax-exempt shareholders.
I agree. What the Labour Government have to do is create a climate in which the level of investment is raised. It should be up to companies to take appropriate decisions, based on economic merits, on whether to pay out dividends to their shareholders or to benefit from growth in capital values as they reinvest in the business.

Mr. Edward Davey: Will the hon. Lady give way?

Ms Kelly: I should like to make some progress first—time is limited.
The right hon. Member for Fylde (Mr. Jack) made a comparison with the United States, which I found somewhat surprising. There is a similar system there whereby pension funds take decisions on the basis of economic merits, not tax advantage. However, I disagree completely with his argument. Sir David Cooksey examined emerging companies in the United States and looked at the performance of companies since 1975. He found that the companies that had grown and thrived were those that had invested and not those that had paid out dividends. I think that the abolition of this measure will help companies by offering them higher long-term growth and ensuring that the tax system does not starve them of capital.

Mr. Jack: How does the hon. Lady square her criticism of my remarks with the fact that there is a higher level of distributed profits in the United States than in the United Kingdom? Although less profit is retained within companies, the US has a much more sustained higher level of growth and lower unemployment than our economy. How does the hon. Lady explain that?

Ms Kelly: The right hon. Gentleman has missed my point. The successful US companies that have grown and thrived are those that have invested in their companies and not those that have distributed their profits.

Mr. Edward Davey: Does the hon. Lady believe that abolishing tax credit for pensioners will help to remove the distortion? Surely retaining the tax credit would not create a distortion.

Ms Kelly: I shall address precisely how pensioner poverty should be tackled. My point is that there is a huge

economic distortion in the tax system which encourages companies to distribute their profits rather than invest them.
The abolition of the dividend tax credit is only one strand of Labour's reform package. The Paymaster General set out the whole package that is designed to encourage investment, growth and employment, highlighting in particular the reductions in corporation tax to a level lower than that of our major competitors and the abolition of the advance corporation tax in its entirety, which was another major tax bias which distorted investment decisions.
I am aware that some non-taxpayers have been affected by the abolition of tax credits. However, the Opposition's argument that the tax credit should be restored or alleviated—the motion is quite difficult to understand—-completely misunderstands the purpose of the tax system. Let us examine how the system is used and how it currently operates. I hope that hon. Members will forgive me if I become a little technical.
Under the previous system, the principal responsibility for paying tax on dividends rested with the company that paid dividends, rather than with the individual or the organisation that received them. If a company decided to pay out some of its profits in share dividends, it had to pay advance corporation tax on that money. Individual investors received a credit with their dividend payments that stated that advance corporation tax had been paid and gave them a credit with the Inland Revenue for the amount paid on their dividends. In fact, the advance corporation tax charge was set at exactly the amount that basic rate taxpayers would pay, thus ensuring that tax was not paid twice—a point recognised by the right hon. Member for Wells (Mr. Heathcoat-Amory).
However, the argument for individuals whose income falls below the tax threshold is completely different. They can claim the tax credit as a cash payment from the Inland Revenue, but, if the non-taxpayer is not liable to pay tax, there is no double taxation. The House of Commons Library states:
By allowing non-taxpayers to cash in their credits—and giving non-taxpayers money to repay a tax they have not paid in the first place—-the tax credit system is doing something for which it was never intended: supplementing the income of non-taxpayers.
It is hard to believe that the Opposition are suggesting reintroducing a tax bias to the system that distorts long-term investment decisions made by companies and pension funds, in order to help poor pensioners. The Daily Telegraph—-not a natural Labour supporter—recognised that point clearly after the July 1997 Budget. It stated:
The quality of life in retirement…depends on growth in the economy, reflected in the prices of shares where the contributor's money is invested. This is the point of the Brown budget that the pension funds would do well to grasp.
I suggest that the Opposition would do well to grasp it too. The best way to help pensioners surely is to assist them indirectly through better growth in the economy and directly, if necessary, by supplementing their income. That is what the Government are doing.
I will not run through all of the measures that we have taken to help pensioners since gaining office in May 1997—no doubt they will be well discussed during the debate. I shall mention only two. For the poorest pensioners, our new minimum income guarantee will ensure a minimum of £75 a week for single pensioners


and almost £117 for pensioner couples. We have saved pensioners an average of £108 a year on their fuel bills—-the poorest pensioners will save £140—by cutting VAT on fuel, introducing winter fuel payments and abolishing the gas levy and through our tougher regulation of gas and electricity prices. That contrasts with the actions of the previous Tory Government, who put 8 per cent. VAT on fuel and tried to double it to 17.5 per cent. I think that that puts this motion in a little context.

Mr. Robert Syms: I apologise to the hon. Member for Dudley, South (Mr. Pearson). If I had listened a little longer before I intervened, I would have realised that he was making a courageous speech. I am so used to Labour Members defending the indefensible that I misinterpreted what was probably a difficult speech for the hon. Gentleman. He has no doubt received many letters on this topic and his contribution to the debate demonstrates his concern about the subject.
We have heard a great deal about reforming and improving tax systems, but there is no such thing as a perfect tax system—all distort to some extent. The key point about the change to advance corporation tax is that, at the end of the day, the Government will have an extra £5 billion a year in revenue to spend in other ways. It is surprising that every reform to make this country more efficient seems to generate additional tax for the Government, whether in corporation tax, ACT or another form of taxation. I am not sure that that will make business more efficient. It will lead the Government to spend more where they should not spend.
The key point about the reform is that, as when one tries to reform any tax system, there are winners and losers. Most Governments, irrespective of party, tend to be sensitive to the fact that there may be people who cannot afford to be losers. When my constituents started writing to me about the changes, many of them could not believe that the effects were what the Government intended. They wrote, "There must be a mistake. I am not particularly well off. I have a few shares. They generate a little income for me which makes a material difference to my life. Please, as a Member of Parliament, write to the Treasury and point that out."
This matter was debated during Budget debates and in Committee, and at one stage the Government acknowledged that they might want to reconsider it. The Opposition are surprised that the Government have not made modest proposals to deal with the problem. As we heard earlier, 300,000 non-taxpaying pensioners have each lost £75 a year and the cost of the measure to the Exchequer is about £25 million. However, the tax change means that the Government are collecting an additional £5 billion, so it does not seem to be unreasonable to address the pensioners' loss. Treasuries and Governments raise a lot of money and then give back a small amount to try to ensure that people who cannot afford the change receive a little help. We are discussing a measure that affects 300,000 non-taxpaying pensioners and 330,000 non-taxpayers who may be earning very little or who do not work but are not of pensionable age. They are losing an average of £75, so some people are losing much more.
Many people's personal financial position is conditioned to some extent by the historic position of their family. We are talking not about sharp, smart people who

pay a lot for advice on arranging their affairs, but about people, some of whom are in their 70s or 80s, who have perhaps inherited a few shares from their father, mother or aunt. Some people have written to me saying that they have an emotional attachment to their few shares because that is all they received from their family. They want to retain that investment; they do not want to be told that they have to sell the shares and consider alternatives.
As we heard in the intervention by my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth), when one sells shares, one pays a price, such as capital gains tax. One can put shares into individual savings accounts, which provide limited tax relief, but there are management charges. There is not an alternative for many people who want only to have a small investment with a small income and to live their lives in retirement with dignity.
The Government have done themselves no favours by not acknowledging that there is a problem and by making no move to deal with that problem. All Governments make a fetish of always getting their way—the previous Conservative Government did so on occasion—and in the end, people think that the Government are not listening. The Government are not listening to people's views on this matter. They have a large majority and there is no doubt that they will carry the vote tonight.
The measure will affect the lives of many of my constituents. I have received many letters about the proposal. I have a somewhat elderly constituency. Some of my constituents are very wealthy, but many are retired and are trying to live on their few investments. Some are asset rich in that they have houses and flats, but they need those to live in and do not particularly want to sell them. They try to make do with their small income.
The Government have done themselves no favours with this measure. I listened to the Paymaster General, who did not deal with any of the points raised by the debate. That is a great pity, because I might respect the Government if they honestly addressed the issues. The hon. Lady went round the houses and gave a litany of points about everything but the problem that the measure will create for pensioners, which is a great pity.
We have heard about the early-day motion that was tabled. Many Labour, Liberal Democrat and Conservative Members have signed it. That is a sign of some strength of feeling, to which I had hoped the Government would pay some attention. There is a real issue, which is affecting people's lives. Some people who have never written to their Member of Parliament felt that they must put pen to paper because their lives and circumstances were threatened.
The Government still have an opportunity to make some concessions towards these relatively poor individuals, who want dignity and income. They want to keep their shares, some of which they have had for a while. If, when we vote, the Government have not made any concession, I hope that some Labour Members will stand up for what they believe and join us in the Lobby. We may not win the day, but I believe that we will win the argument on an issue that is important to so many of our constituents.

Mr. Tony McNulty: I have listened very carefully to the debate, but remain unconvinced by Opposition Members—not least the hon. Member for


Kingston and Surbiton (Mr. Davey), the Liberal Democrat spokesman, who took the best part of 27 minutes to "unconvince" me.
It is very easy to take in isolation one measure, however important, in an extremely complex area, without explaining the whole story across government. It is very easy to give erroneous impressions by dwelling on one aspect of policy in one area. Given Opposition Members' speeches, it is clearly easy to scaremonger, worry and suggest that there are no alternatives. There is almost a mantra to the Opposition's policy: "If we say often enough that there is no alternative, there may not be any alternative." Opposition Members have not, in any shape or form, answered the fundamental case put by the Paymaster General. It is very easy to do all those things, but it is also quite shameful.
Many Opposition Members are using this issue to give people cause for concern. Their time and energy—-not least, given some of their professional backgrounds—would have been, and still will be, better spent helping the people who are affected by the change to alter their investment patterns. The point about the range of other vehicles that can be utilised has not been discredited. Opposition Members have said often enough that it has been discredited, but have not sufficiently proved the charge that there is no alternative. The fact that St. Margaret used to say that there is no alternative, does not automatically mean that such a response can be invoked at any time in order to change an argument.

Mr. Bercow: Will the hon. Gentleman give way?

Mr. McNulty: No, I have precious little time and others are still waiting to speak. The hon. Gentleman can have a cup of tea with me after the debate.
As has been suggested, the measure removes a distortion, and needs to be seen in the context of discouraging companies from distributing profits and encouraging them to reinvest. Again, that charge has not been answered—certainly not by the right hon. Member for Fylde (Mr. Jack) in response to my hon. Friend the Member for Bolton, West (Ms Kelly). The right hon. Gentleman's little foray into American business history showed more about his lack of knowledge of it than otherwise. The case has been well made for the need to restore investment levels and to develop economic policy for the future. In that context, Opposition Members' comments at the beginning of the debate, which seems so long ago now, about Labour forgetting the working class and being interested only in the middle class were facile and fatuous.
In considering this policy, we must appreciate the reality of the Government's action on pensions. Although I do not doubt that many of the cases read out by Conservative Members on 30 June—I have read through them quite assiduously—were true, they did not offer anything like half the story of what people may lose if they do not opt for alternatives, and what they will gain in other areas Of policy on which the Government are working. To.suggest only half the story, but to paint it as the whole story, does not do the constituents of Opposition Members that much of a favour.
Every item detailed by Labour Members has been ridiculed or pooh-poohed by Opposition Members. We were told by the hon. Member for Kingston and

Surbiton—probably in the 22nd minute of his 27-minute peroration—that winter payments for pensioners are a gimmick. He was asked several times—admittedly, from a sedentary position—whether, in that case, the Liberals would abolish the current arrangements. There was no answer, so we must assume that it was only a gimmick. It was so irrelevant to the Liberals that they could not be bothered to table an amendment to the motion.
On 30 June 1998, the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb)—in between writing his stunning little column for Accountancy Age—said that fuel was crucial to poorer pensioners. Opposition Members made no mention of the fact that pensioners would gain £108 to £140 a year in fuel payments—far more than they would lose if they stayed in their current savings vehicle. During the passage of the Bill that became the Finance (No. 2) Act 1998, an Opposition Member said that the debate on the subject was another red herring.
The only mention that was made of the £21 billion invested in the national health service was a cack-handed attempt at "Brucean" economics by the hon. Member for Kingston and Surbiton. During his 27 minutes, he tried to say that £21 billion equals £1.5 billion, and that we are spending the £1.5 billion only because the Liberals pressured us to. That is nonsense.

Mr. Bercow: Will the hon. Gentleman give way?

Mr. McNulty: I cannot, I am afraid. I have told you before: we shall have a cup of tea afterwards.

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. The occupant of the Chair would no doubt be very pleased to be able to have a cup of tea, but the hon. Gentleman knows that that is impossible. His remarks are being addressed to me.

Mr. McNulty: I apologise profusely, Mr. Deputy Speaker.
Strangely, there was only ridicule about free eye tests. Nothing was said about the £3 billion programme to improve home residential care programmes, which is just the start of what we are doing, especially for the very elderly, in that regard. Nothing was said about the White Paper proposals on concessionary travel for all pensioners.
Nothing was said about benefit take-up, apart from a facile little comment by the hon. Member for East Worthing and Shoreham (Mr. Loughton) on 30 June 1998, which seemed to suggest that pensioners who desperately needed benefits lacked virtue if they took them up. He spoke sneeringly of their having to rely on the welfare state instead of supporting themselves. If he was present—which he was for much of the evening—I would remind him that all those pensioners paid their dues time and again to the welfare state, and that it is not a matter of shame that they take that money back again, but their due right. If that is what they need into their late old age, we should encourage that.
I shall not dwell on the other half of the equation—not mentioned in the motion or in interventions—concerning future pensioners. The world having stopped and then started again for Conservative Members in the year zero, 1 May 1997, they have no idea what the future is about,


other than next week's headlines and hoping that William does better at the next Question Time than he did at the previous one.
In Committee on the Bill that became the Finance (No. 2) Act 1998, the hon. Member for East Worthing and Shoreham spoke about
the culprits and perpetrators of the crime, who sit on the Labour Benches."—[Official Report, 30 June 1998; Vol. 315, c. 168.]
If there are those who perpetrate crime in this regard, they do not sit, and in the past have not sat, on Labour Benches.
The hon. Member for Chichester (Mr. Tyrie) tells us that we shall be judged on the decision that we take. Well, I hope that we are judged on the totality of the decisions that we take, if only in terms of those short items about VAT on fuel and what we are doing for the lowest-paid pensioners. Opposition Members will be judged on the record of their time in government; not on their rhetoric—a word that an Opposition Member used at Question Time today, emphasising the second syllable instead of the first—but on their action over the past 18 years. In that regard, they are still found wanting.
I urge all those on whom this measure impacts the most to look at everything that the Government are doing in this area, not just at dividend tax credits, and remember that Conservative Members are no friends to pensioners. They were not during the past 18 years, and despite their weasel words they are certainly no friend of pensioners now.

Mr. Tony Baldry: I shall be brief because the issues are of a narrow compass and we have been going for nearly two hours. The debate is bizarre. Ministers have not addressed the points in the Opposition motion. It says, very straightforwardly, that from April 1999, nearly a third of a million non-taxpaying pensioners and a third of a million other non-taxpayers will lose an average of £75 each because of the Government's decision to abolish the dividend tax credit. At no stage did the Paymaster General or anyone else on the Government Benches say that that statement was inaccurate, fallacious or in any way wrong.
The motion further notes that
80,000 of the pensioners affected will lose over £100 per year".
That figure has not been challenged, so presumably it is correct—

Ms Sally Keeble: Will the hon. Gentleman give way?

Mr. Baldry: No. I shall be brief. The hon. Lady wants to get in, I think.
The motion goes on to state that
it is unacceptable that basic rate taxpayers and higher rate taxpayers are unaffected directly by this decision which affects only non-taxpayers".

There has been no explanation from the Paymaster General or anyone else as to why such circumstances have come about.

Ms Keeble: Will the hon. Gentleman give way?

Mr. Baldry: I will give way to the hon. Lady, but she is taking up time from her own speech.

Ms Keeble: Thank you. Much has been made of the fact that people stand to lose £75, which is the amount that they gain in tax credit. However, my reading of your motion is that you are not proposing to reinstate—

Mr. Deputy Speaker: Order. The hon. Lady has been in the House long enough to know that she is addressing the Chair when she says "you".

Ms Keeble: I apologise. The hon. Gentleman has not dealt with the point that his party does not propose to reinstate the full amount of the tax credit, but speaks of some £37.50.

Mr. Baldry: My point, which is not disputed and which the hon. Lady confirms, is that pensioners will lose £75, on average. That has not been challenged.
I read the Government's amendment to see what conceivable explanation there is. Having been in the House for 15 years, I assume that there must be some rational explanation. The Government amendment deals at length with income support, which may be welcome, but it does not necessarily relate to the non-taxpaying pensioners who will lose out.
The only justification in the Government amendment that possibly addresses the point is the statement that
the Government has removed major company taxation distortions".
I hope that when she winds up the debate, the Minister will help me to understand how, in my constituency surgery, I should explain to pensioners who have some small income from dividends and who are non-taxpayers that they will lose money each year—tough—because the Government have removed major company taxation distortions.
The simple fact is that as a consequence of that action, a significant number of pensioners will be worse off, and nothing that we have heard this evening from the Government Benches has attempted to disguise that. The only suggestion that we have heard is that those pensioners could perhaps put their money into some other form of savings. That ignores the fact that for people in their 70s or 80s who own a few shares, that is not a realistic proposition in view of the management charges and all the other administration.
I hope that the Minister will explain to the House how it can be right that only non-taxpayers are hit, and that they are hit because of some mantra about a major company taxation distortion being removed. That point has not been addressed by those on the Government Benches this evening. Until they do so, many people will feel that the Government have failed pensioners.
The hon. Member for Birmingham, Selly Oak (Dr. Jones) made the valid comment that exemptions are granted for bank dividends and savings dividends, so why should there not be exemptions for such company dividends? What is so special about those?
The Government have had ample time during the debate to address those issues. They have failed to do so. I hope that the Minister will deal with them in her winding-up speech.

Mr. Laurence Robertson: I, too, am amazed that despite the wording of our motion, the Government's amendment does not address it. The speeches that we have heard tonight have not dealt with our arguments.
A small amount of Government revenue is involved, yet it is made up of sums that are extremely significant to some of the poorer pensioners. It is hard to believe that any Government would set out to penalise the poorest in society. I, for one, hope that that is not the Government's intention and that they will change their mind on that policy.
The removal of advance corporation tax is a short-sighted act that has many knock-on costs, and it will hit many people and many organisations. The scrapping of personal equity plans and tax-exempt special savings accounts is an unnecessary and unsettling change. They are popular schemes and are open to everybody, and they seem to have been scrapped simply for change's sake. The removal of dividend tax credits from the poorest pensioners and non-taxpayers is yet another totally unnecessary act.
These changes will affect many people—the poorest pensioners, future pensioners and ordinary savers—and organisations such as Churches, charities and local councils, but the principal point is that they will also hit companies; and hit them in the way that the Government say they will not. The Government say that they want to encourage investment, but as far as I can make out the measure will reduce investment in industry and in business.
For example, if there are no tax advantages, why should organisations and people—especially poorer people—invest their money where an element of risk is involved? The tax advantage, through ACT credits and tax relief on dividends, makes that risk acceptable. The change may persuade non-taxpayers to put their money where it is completely safe, but that would deny that investment to industry and business.
The Government seem to be somewhat embarrassed by the changes that they have made. First, many Labour and Liberal Democrat Members have signed the early-day motion, which is almost identical to our motion. Secondly, last June the then Paymaster General said:
I am aware also of the growing anxiety among poorer non-taxpayers who have been hit by the measure".—[Official Report, 30 June 1998; Vol. 315, c. 175.]
The Chancellor himself talked about not introducing the change until 1999, to allow people to reinvest—precisely the point that I am making. People will take money out of equities and out of industry and reinvest somewhere else.
The Government look to be further embarrassed by the difficulty with replying to letters we have written on behalf of constituents. I wrote to the Chancellor about this issue on 22 July 1998. In spite of chasing him for a reply many times, I have yet to receive a reply. The Government seem to be extremely embarrassed by the measure; because of that—and, more so, because it would be the right thing to do—I hope that they reverse it.

Mrs. Theresa May: I am grateful for the opportunity to contribute briefly to the debate. I shall focus on two points, in particular one that has not been discussed fully, although it was referred to in passing by the hon. Member for Kingston and Surbiton (Mr. Davey).
One of my constituents, from Walker road in Maidenhead, came to my surgery recently. She was very concerned, because she had suddenly discovered the issue of dividend tax credits and that, as a non-taxpaying pensioner shareholder, she would suffer to the tune of several hundred pounds as a result of the Government's policy.
My constituent was outraged at the Government's policy. She thought it quite appalling that the Government should tax non-taxpayers in such a way, but she also mentioned her concern that many non-taxpaying shareholders in such a position are still not aware of the Government's policy or of the way in which their finances will be hit by it.
There is an issue in respect of lack of publicity. Many hon. Members raised the concerns with the Government in the summer, of pensioner constituents but, because of the comments of the hon. Member for Coventry, North-West (Mr. Robinson), the former Paymaster General, we assumed that the Government had seen the error of their ways and would change their policy to ensure that non-taxpaying pensioners would not lose out.
I wrote many letters to constituents saying that the Government had expressed their sympathy and would review the position. My constituents wrote back saying how pleased they were to hear that.
We now realise that the Government cynically left a period of months during which they thought the issue would go away and that people would not notice, and then, shortly before Christmas, they sneaked out the announcement that they intended to stick to their original policy. Many of my constituents and others who are currently non-taxpayers will be appalled by the fact that they will have to pay tax as a result of the Government's policy. They will lose out financially, but, as the shadow Chief Secretary said, many of them may not discover that fact until April 2000. They will wonder what on earth the Government were doing and why they did not listen to the concerns expressed.
Secondly, we heard an extraordinary peroration from the Paymaster General. We had a circuitous tour of Government policies and of the various economic objectives that the Government have claimed for themselves. It did not take the Paymaster General long before she used those good old words "boom and bust", which we hear in virtually every Minister's speech. She completely failed to answer the question put by my hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibb). He asked how on earth the Government can claim that they will meet those economic objectives and ensure that we never again have boom and bust in our economy in any shape or form purely by taxing non-taxpaying pensioners, who are some of the poorest pensioners, to the tune of £25 million. I trust that the Economic Secretary will answer that question.

Mr. Nick Gibb: I congratulate the hon. Member for Bristol, South (Dawn Primarolo) on her promotion to Paymaster General.
Although in Opposition time, this is not a party political debate—it is the Commons versus the Executive. The House of Commons is performing its duty to tell the Government that they have done something wrong. The cross-party motion that led to the debate was signed by 110 Members, including 29 Liberal Democrats and 28 Labour Members, all of whom believe that the Government are wrong on this issue.

Ms Kelly: If the Opposition believe that this measure is deeply flawed, would they reimpose the tax credit?

Mr. Gibb: The debate is about Government activity. We want this tax credit to be extended to 2004 as a minimum. Ideally, we would like the full credit to remain at 20 per cent. and not to be abolished for non-taxpaying pensioners. It is wrong to end the repayment of dividend tax credits to 300,000 non-taxpaying pensioners. It is wrong to confiscate an average of £75 a year from people who can least afford to lose that amount. It is wrong of the Treasury to argue, as the Paymaster General did in her press release, that these people have
time to consider their investments before the new rules take effect, for example, moving to tax-favoured investments should they wish to do so.

Dr. Desmond Turner: Will the hon. Gentleman give way?

Mr. Gibb: No, I shall not give way, because I want to make progress.
This measure is wrong because the 300,000 people concerned are not highly sophisticated investors who consider their investments. They are elderly people on very low incomes with a few privatisation or windfall shares. They have come to rely on the tax credit refund that they claim every year. It is wrong of the Government to tell them to sell their shares and to buy gilts, or to transfer their shares to an ISA, the charges relating to which will be more than the tax credit they are losing. This measure affects people of an age and at a time when they will never be able to earn or to save enough money to make up the loss.
The hon. Member for Kingston and Surbiton (Mr. Davey) said that the minimum income guarantee alluded to by the Paymaster General does not protect the incomes of people who have savings in excess of £8,000 and so will not qualify for income support.
The hon. Member for Knowsley, South (Mr. O'Hara), who chairs the all-party group for older people, made a reasoned and well-argued appeal to the Government, pointing out that, in July 1997, special efforts were made to ensure that basic and higher-rate taxpayers would not lose out from the changes to tax credits. He also pointed out that two thirds of pensioners did not pay tax at all, and that tax-free savings vehicles were therefore inappropriate for most pensioners. He also made the point that the cost of ISAs would probably outweigh any benefit to be gained from putting shares into such vehicles.
My right hon. Friend the Member for Fylde (Mr. Jack) made the excellent point that the idea that returning the United Kingdom corporation tax system to the classical system that exists in the United States would reduce

the level of dividend payments was nonsense, given that the United States has a much higher dividend-payment ratio than the United Kingdom. He also drew attention to the effect that this mean-minded measure would have on the Church's income, resulting in some £12 million less for the Church of England and £400 million less for the charity sector as a whole.
The hon. Member for Dudley, South (Mr. Pearson), formerly parliamentary private secretary to the former Paymaster General, expressed the same sympathy for the cause as his former boss. He believes that the measure may well appear mean-minded and unfair to those affected by it.
My hon. Friend the Member for Arundel and South Downs (Mr. Flight) pointed out the nonsense of the Government's description of the abolition of dividend tax credits as some kind of beneficial corporation tax reform, saying that in reality—as everyone knows—it was simply a major tax revenue-raising measure. The hon. Member for Bolton, West (Ms Kelly) made a valiant attempt to defend the indefensible, but I am afraid that, despite her technical expertise, she is wrong. She claimed that non-taxpayers should never have been allowed to reclaim the tax credit—that was somehow an anomaly. That is nonsense. Unless non-taxpayers can reclaim the credit that is available to taxpayers, they will effectively lose the benefits of their personal tax allowance, an allowance granted to the whole population by Parliament.
My hon. Friend the Member for Poole (Mr. Syms) mentioned the surprise felt by many of our constituents that the Government have not sorted out the problem. They made a big error in not doing so: they have shown that they are not listening to the real anxieties felt by thousands of pensioners.
The hon. Member for Harrow, East (Mr. McNulty)—in a complacent speech, in which he tried to defend the Government—revealed only that he does not understand the issue, or, more worrying, does not care about it. My hon. Friend the Member for Banbury (Mr. Baldry) pointed out that Labour Members who tried to defend the Government had not dealt with any of the substantive points in the motion. My hon. Friend the Member for Tewkesbury (Mr. Robertson) observed that, in urging pensioners to move their investments, the Government might well, in effect, be urging people to take their investments away from industry. My hon. Friend the Member for Maidenhead (Mrs. May) pointed out that, as most non-taxpaying pensioners were not even aware of the issue, the Government's problems were yet to arise.
The Paymaster General made an astonishing defence. She listed a set of economic objectives that she believed would be achieved by taking £25 million away from the poorest pensioners in the country. I cannot believe that she really thinks that. She talked about the poorest pensioners' having an alternative if they transferred their shares to an ISA. Has she seen the briefing by Age Concern to which the hon. Member for Kingston and Surbiton referred? She seems to be saying, from a sedentary position, that she has, but has she read it? It clearly states that the average amount currently reclaimed by non-taxpayers is worth £75. That means that the non-taxpayer involved will have an income from shares of £375. If we use the Treasury's own assumption of a 3 per cent. return on income, that means that the capital will be £12,500, leading to a charge in an ISA that is likely to be about 0.5 per cent., or £62.50 a year.


When that credit falls from 20 per cent. to 10 per cent., as it will in April, the income will be £37.50, which will be more than eaten up by £62.50 worth of charges. On top of that, there is likely to be a l per cent. start-up cost in the ISA of £125.
The measure that we seek to have reversed arose from the Government's decision in July 1997 to end repayment of dividend tax credits to pension funds. Either inadvertently or deliberately, the measure was extended to include non-taxpaying individuals from April this year.
During the passage of last year's Finance Bill, we tried to persuade the Government to reverse the measure as it affected individuals. Although we failed in our attempt, we received a sympathetic hearing from the then Paymaster General, who said that he would look again at the issue. Sympathetic noises continued to emanate from the Treasury until 10 December. On that day, the then Financial Secretary sneaked out a written answer that stated that the Government confirmed the decision that was taken in July 1997 to end the repayment of dividend tax credits to non-tax paying individuals.
That decision has disappointed many hon. Members and many thousands of pensioners, including my constituent, Mr. Caffyn. On reading the Government's decision on 10 December, he wrote to me that he "was sadly disappointed." He went on to say:
It's more upsetting when I know that many of the people who will be affected by this travesty are those who served in the armed services or nursing services during the 39/45 war years.
Age Concern, which has campaigned vigorously on the issue, has rightly pointed out:
many of those affected are likely to be older pensioners who will not have had the same opportunity to contribute to SERPS or private pensions and are therefore heavily dependent on income from savings and investments.
The majority of hon. Members know that the decision is wrong. Because they know it to be wrong, it is right that we do our duty as Members of Parliament and tell the Government so.

Mr. Bercow: Does my hon. Friend agree that, if the 28 Labour parliamentarians who signed early-day motion 56 criticising the Government on the subject fail to join us in the Division Lobby tonight, they will be guilty of an abdication of responsibility that should be widely publicised?

Mr. Gibb: It would be sad if a large number of the hon. Members who signed the early-day motion were not to join us in the Division Lobby tonight because it would send a clear signal to the Government, who may change their mind.

Dr. Desmond Turner: It is touching to hear the Opposition's concern for the deprivation of £75 a week from the average pensioner—[HON. MEMBERS: "A year."] Sorry, a year. It is touching also to hear the Opposition's concern for the poorest pensioner. It is not the poorest pensioners who are being deprived, but it was the poorest pensioners who were deprived of £1,000 a year by the previous Government through their decision to break pensions' link to earnings. Has the hon. Gentleman forgotten that?

Mr. Gibb: Will the hon. Gentleman give a commitment that his Government will restore that link?

No, he will not. I hope that we will see him in the Division Lobby tonight as I believe that he is one of the signatories of the early-day motion.

Mr. O'Hara: As one of the Members who signed the early-day motion, may I point out again that it did not criticise the Government, but appealed to and encouraged them? I made precisely that point in an intervention. It belies the position of those Members who signed the early-day motion to associate them with the lazily tabled motion on the Order Paper, which uses exactly the same words.

Mr. Gibb: I am sure that the hon. Gentleman's career is now safe.
Some Members will have signed early-day motion 56 just to get a quick mention in their newspapers, but have no intention of voting for that motion this evening. However, other Labour Members can be expected to stick to their principles. We look forward to joining them in the Lobby.
If I were a Labour Member, I would vote with even greater conviction for the Opposition motion, as it would not only be the right thing to do but would make practical political sense. In April 2000, the vast majority of the 300,000 pensioners we have been discussing will submit a claim to the Inland Revenue for their annual tax credit refund. However, they will not have read finance legislation, the House's proceedings or the money pages of the press informing them that they can no longer reclaim that money, and they will simply, as usual, submit a claim.
By return of post, those people will receive a letter from the Inland Revenue saying that they cannot have their cheque for £75, £100, £200, or whatever figure they were expecting, because the Government have changed the law. Only months from a general election, the Government will have to contend with 300,000 angry pensioners who have suffered a large personal financial loss directly because of decisions taken by the Chancellor. That cannot be good.
A cynical person might argue that it would be better for the Opposition if the Government did not reverse the decision. However, the Opposition do want the Government to reverse it. We want Ministers to reverse it because of people such as a gentleman from Christchurch, who said:
The thought of losing the ability to reclaim tax credits has really upset us. Last year, the total reclaim between the two of us amounted to only £118.16, but even that small amount makes a big difference to us.
Opposition Members have received many letters from many people describing the very real hardship that they will suffer if the provision is not reversed. I should like to read a letter from a 67-year-old lady. Labour Members might learn something from her letter, which reads:
I have a mentally ill son of 44. When I knew how severely ill he was and would never be able to work, I set out to try to put a small nest-egg away for him for his later years, and I stayed at work for an extra five years because of it. As a consequence, he has about £120 a year tax refund which I use to replace things like shoes and clothes.
The Opposition want the Government to reverse the decision because of people like those. However, those cases represent only the tip of the iceberg—an iceberg that will tear into the Government if they fail to reverse the decision.


Reversing the decision will cost only £25 million a year, and there should be no technical difficulties in doing so. I therefore urge all hon. Members to vote for what they know to be right—allowing the House to flex its muscle—by voting for the Opposition motion.

(Ms Patricia Hewitt): We have had an interesting and lively debate, although I am sure that hon. Members will forgive me if I cannot deal with every point that has been made.
The hon. Member for Kingston and Surbiton (Mr. Davey) made much, at considerable length, of the point that the minimum income guarantee that the Government are introducing for the elderly will not assist those from whom the tax credit will be withdrawn should they not change their investments. I should stress that he was quite wrong on that point. The minimum income guarantee—which will mean an income increase for some of the poorest people in the United Kingdom, of £238 a year for a single pensioner and of £377 a year for a couple—will apply to a large number of non-taxpayers with dividend income.
Under the income support rules, it is perfectly possible to qualify for full income support entitlement with savings of up to £3,000. Depending on the dividend rate, shares of £3,000 would produce a tax credit of about £20, although the tax credit would be below that if the shares were below £3,000.
The average numbers that have been quoted in this debate for tax credits for non-taxpaying pensioners have been thoroughly misleading. Two thirds of non-taxpayers currently receiving a tax credit on their dividend receive less than the average of £75 that has been quoted, half of them receive less than £50 a year in tax credit, and about one third receive less than £20. In other words, they receive less than the tax credit that would be received on a typical shareholding that would still qualify them for full income support if it was their only saving.
The minimum income guarantee that we are putting in place will benefit many of those about whom the hon. Member for Kingston and Surbiton was concerned, just as the minimum tax guarantee that we are putting in place will remove from tax many of the elderly pensioners who are now paying tax.

Mr. Edward Davey: Will the hon. Lady give way?

Ms Hewitt: No, I am afraid that I shall not. I hope that the House will understand that, as the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb) took up a considerable part of my time, I cannot give way. I have dealt with the point that the hon. Member for Kingston and Surbiton made at such length and with such inaccuracy.
My hon. Friends the Members for Knowsley, South (Mr. O'Hara) and for Dudley, South (Mr. Pearson) urged the Government to reconsider. I understand their concerns and those of other hon. Members. That is why we undertook to look again at the issue and took time to consider it carefully and look at the representations that we had received from many hon. Members. However, the abolition of payable tax credits to UK non-taxpayers is inextricable from the abolition of advance corporation tax.
The right hon. Member for Fylde (Mr. Jack) and the hon. Member for Arundel and South Downs (Mr. Flight) criticised the abolition of ACT—a criticism that was answered by my hon. Friend the Member for Bolton, West (Ms Kelly) in an exceptionally well-informed speech. Our corporation tax reforms, which were announced by my right hon. Friend the Chancellor and are now coming into effect, will remove the distortions of payable tax credits that led to UK-based companies being put under pressure to distribute income in dividends rather than reinvesting the money in the growth of the company. We are removing the distortion of surplus ACT, which was created by the previous Government and has led to UK-based companies paying £7 billion in surplus ACT over the years. It led to the absurdities and complexities of the foreign investment dividend, which was a cack-handed attempt by the previous Administration to deal with the mess created by surplus ACT.
Part of our corporation tax reform package, which has been widely welcomed by business—we heard nothing about that from the Opposition—is a cut in corporation tax to the lowest rate ever in this country and a lower rate than the countries with which we compete.

Mr. Soames: Will the hon. Lady give way?

Ms Hewitt: No. I am sorry, but I have already explained—

Mr. Soames: rose—

(Mr. Michael J. Martin): Order. The hon. Lady says that she is not going to give way.

Ms Hewitt: I am grateful, Mr. Deputy Speaker. I have explained my reasons. The Government are not going to take lessons from the Opposition in how to run the economy or how to create a tax system that is good for business. We inherited a productivity gap of 40 per cent. with the United States and a personal pensions mis-selling scandal, which my predecessor and I are having to put right. It has cost hundreds of thousands of people who were mis-sold a pension an average of £4,000 in their pension investment. The previous Administration gave this country inflation in double figures, which ate into the savings of elderly people—something about which we heard nothing this evening.

Mr. Gibb: Will the Minister give way?

Ms Hewitt: No, I will not. I have already said that I will not give way. The hon. Gentleman has wasted quite enough time already.
My hon. Friend the Member for Harrow, East (Mr. McNulty) rightly pointed out that the Conservative party and the Conservative Government were no friends of the pensioners, and he reminded the House of the package of benefits that the Government have put in place for elderly people, including the cut in VAT on fuel—VAT introduced by the previous Government—coupled with a package of improvements and help with fuel bills worth £108 a year, or £140 a year to the poorest elderly people; the minimum income guarantee, which I have mentioned, and the minimum tax guarantee, on which we will hear more this year; free eye tests; the national


concessionary fares scheme; and the investment in the NHS that will make such a difference to elderly people in particular.
The hon. Member for Banbury (Mr. Baldry) and the hon. Member for Maidenhead (Mrs. May) asked how they would explain these changes to elderly constituents, and how taxing non-taxpayers would help. Let me make it quite clear—we are not taxing non-taxpayers. We are removing a repayable tax credit that was covered by ACT. The abolition of ACT necessitates the abolition of the repayable tax credit.
Conservative Members ought to be reminded of what the former Chancellor of the Exchequer said in 1993 when he cut repayable tax credits. He said that the payments of lower-rate payers and non-taxpayers
will be reduced by five percentage points, saving the Exchequer no less than £1 billion a year."—[Official Report, 16 March 1993; Vol. 221, c. 186.]
The right hon. Member for Charnwood (Mr. Dorrell) defended that policy in Standing Committee, and said that the then Chancellor
decided that to collect extra revenue principally from tax-exempt shareholders"—

Mr. Gibb: Will the Minister give way?

Ms Hewitt: I am in the middle of a quotation, which I will finish. The right hon. Member for Charnwood said that the then Chancellor
decided that to collect extra revenue principally from tax-exempt shareholders…is to collect revenue from a group of people with taxable capacity, but who are not taxpayers".—[Official Report, Standing Committee A, 15 June 1993; c. 377.]
I do not recall the hon. Member for Bognor Regis and Littlehampton or any of his right hon. and hon. Friends complaining at the time.
The Government's plans are good news for pensioners, good news for business and good news for the elderly.

Mr. Gibb: Will the Minister give way?

Mr. Deputy Speaker: Order. The Minister is not going to give way.

Ms Hewitt: I am not surprised that Conservative Members do not want to hear the facts—because the facts never help their cause. However, we are helping pensioners and business. We are raising the pension with the minimum income guarantee and cutting corporation tax to its lowest-ever rate. That is why I ask the House to reject the Opposition motion and to support the Government amendment.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 166, Noes 336.

Division No. 35]

[9.59 pm


AYES


Allan, Richard
Baldry, Tony


Amess, David
Beith, Rt Hon A J


Ancram, Rt Hon Michael
Bercow, John


Arbuthnot, Rt Hon James
Beresford, Sir Paul


Ashdown, Rt Hon Paddy
Body, Sir Richard


Atkinson, Peter (Hexham)
Boswell, Tim


Baker, Norman
Boottomley, Peter (Worthing W)





Bottomley, Rt Hon Mrs Virgina
Lidington, David


Brand, Dr Peter
Lilley, Rt Hon Peter


Brazier, Julian
Lloyd, Rt Hon Sir Peter (Fareham)


Breed, Colin
Llwyd, Elfyn


Brooke, Rt Hon Peter
Loughton, Tim



Browning, Mrs Angela
Luff, Peter


Bruce, Ian (S Dorset)
McIntosh, Miss Anne


Burnett, John
MacKay, Rt Hon Andrew


Burns, Simon
Maclean, Rt Hon David


Campbell, Menzies (NE Fife)



Cash, William
Maclennan, Rt Hon Robert


Chapman, Sir Sydney (Chipping Barnet)
McLoughlin, Patrick


Chidgey, David



Chope, Christopher
Madel, Sir David


Clappison, James
Major, Rt Hon John


Clark, Rt Hon Alan (Kensington)
Malins, Humfrey


Clarke, Rt Hon Kenneth (Rushcliffe)
Maples, John


Clifton—Brown, Geoffrey
Mates, Michael


Cormack, Sir Patrick
Mawhinney, Rt Hon Sir Brian


Cotter, Brian
May, Mrs Theresa


Cran, James
Michie, Mrs Ray (Argyll & Bute)


Davey, Edward (Kingston)
Moore, Michael


Davis, Rt Hon David (Haltemprice)
Moss, Malcolm


Day, Stephen
Nicholls, Patrick


Dorrell, Rt Hon Stephen
Öpik, Lembit


Duncan, Alan
Ottaway, Richard


Duncan Smith, Iain
Page, Richard


Duncan Smith, Iain
Paterson, Owen


Emery, Rt Hon Sir Peter
Pickles, Eric


Evans, Nigel
Prior, David


Faber, David
Randall, John


Fallon, Michael
Redwood, Rt Hon John


Flight, Howard
Rendel, David


Forth, Rt Hon Eric
Robathan, Andrew


Foster, Don (bath)
Robertson, Laurence (Tewk'b'ry)


Fox, Dr Liam
Roe, Mrs Marion (broxbourne)


Gale, Roger



George, Andrew (St Ives)
Rowe, Andrew (Faversham)


Gibb, Nick
Russell, Bob (Colchester)


Gill, Christopher
Sanders, Adrian


Gillan, Mrs Cheryl
Sayeed, Jonathan


Gorrie, Donald
Shephard, Rt Hon Mrs Gillian


Gray, James
Simpson, Keith (Mid-Norfolk)


Green, Damian
Smith, Sir Robert (W Ab'd'ns)


Greenway, John
Soames, Nicholas


Grieve, Dominic
Spelman, Mrs Caroline


Gummer, Rt Hon John
Spicer, Sir Michael


Hague, Rt Hon William
Spring, Richard


Hamilton, Rt Hon Sir Archie
Stanley, Rt Hon Sir John


Hammond, Philip
Streeter, Gary


Harris, Dr Evan
Stunell, Andrew


Hawkins, Nick
Swayne, Desmond


Hayes, John
Syms, Robert


Heald, Oliver
Tapsell, Sir Peter


Heath, David (Somerton & Frome)
Taylor, Ian (Esher & Walton)


Heathcoat—Amory, Rt Hon David
Taylor, Matthew (Truro)


Hogg, Rt Hon Douglas
Taylor, Sir Teddy


Horam, John
Tonge, Dr Jenny


Howard, Rt Hon Michael
Townend, John


Howarth, Gerald (Aldershot)
Tredinnick, David


Hughes, Simon (Southwark N)
Trend, Michael


Hunter, Andrew
Tyler, Paul


Jack, Rt Hon Michael
Tyrie, Andrew


Jenkin, Bernard
Viggers, Peter


Jones, Nigel (Cheltenham)
Wallace, James


Kennedy, Charles (Ross Skye)
Walter Robert


Key, Robert
Wardle, Charles


Kirkbride, Miss Julie
Webb, Steve


Laing, Mrs Eleanor
Wells, Bowen


Lait, Mrs Jacqui
Welsh, Andrew


Lansley, Andrew
Whitney, Sir Raymond


Leigh, Edward
Whittingdale, John


Letwin, Oliver
Widdecombe, Rt Hon Miss Ann


Lewis, Dr Julian (New Forest E)
Wilkinson, John



Willetts, David






Willis, Phil
Young, Rt Hon Sir George


Wilshire, David



Winterton, Mrs Ann (Congleton)
Tellers for the Ayes:


Winterton, Nicholas (Macclesfield)
Mr. John M. Taylor and


Yeo, Tim
Mr. Tim Collins.


NOES



Abbott, Ms Diane
Cousins, Jim


Adams, Mrs Irene (Paisley N)
Cranston, Ross


Ainger, Nick
Crausby, David


Ainsworth, Robert (Cov'try NE)
Cryer, Mrs Ann (Keighley)


Allen, Graham
Cryer, John (Hornchurch)


Anderson, Donald (Swansea E)
Cummings, John


Armstrong, Ms Hilary
Cunliffe, Lawrence


Ashton, Joe
Cunningham, Rt Hon Dr Jack (Copeland)


Atherton, Ms Candy
Cunningham, Jim (Cov'try S)


Atkins, Charlotte
Dalyell, Tam


Austin, John
Darvill, Keith


Banks, Tony
Davey, Valerie (Bristol W)


Barnes, Harry
Davies, Rt Hon Denzil (Llanelli)


Barron, Kevin
Davies, Geraint (Croydon C)


Battle, John
Davies, Rt Hon Ron (Caerphilly)


Bayley, Hugh
Dawson, Hilton


Beard, Nigel

Dean, Mrs Janet


Beckett, Rt Hon Mrs Margaret
Denham, John


Bell, Martin (Tatton)
Dismore, Andrew


Bell, Stuart (Middlesbrough)
Dobbin, Jim


Benn, Rt Hon Tony
Dobson, Rt Hon Frank


Bennett, Andrew F
Donohoe, Brian H


Benton, Joe
Doran, Frank


Bermingham, Gerald
Dowd, Jim


Berry, Roger
Drew, David


Best, Harold
Dunwoody, Mrs Gwyneth


Betts, Clive
Eagle, Angela (Wallasey)


Blears, Ms Hazel
Eagle, Maria (L'pool Garston)


Blizzard, Bob
Edwards, Huw


Blunkett, Rt Hon David
Efford, Clive


Boateng, Paul
Ellman, Mrs Louise


Borrow, David
Fatchett, Derek


Bradley, Keith (Withington)
Field, Rt Hon Frank


Bradley, Peter (The Wrekin)
Fisher, Mark


Brinton, Mrs Helen
Fitzpatrick, Jim


Browne, Desmond
Fitzsimons, Lorna


Buck, Ms Karen
Flint, Caroline


Burden, Richard
Flynn, Paul


Burgon, Colin
Follett, Barbara


Butler, Mrs Christine
Foster, Rt Hon Derek


Caborn, Richard
Foster, Michael Jabez (Hastings)


Campbell, Alan (Tynemouth)
Foster, Michael J (Worcester)


Campbell, Mrs Anne (C'bridge)
Foulkes, George


Campbell, Ronnie (Blyth V)
Fyfe, Maria


Campbell—Savours, Dale
Galloway, George


Casale, Roger
Gapes, Mike


Caton, Martin
Gardiner, Barry


Cawsey, Ian
Gerrard, Neil


Chapman, Ben (Wirral S)
Gibson, Dr Ian


Chisholm, Malcolm
Gilroy, Mrs Linda


Clapham, Michael
Godman, Dr Norman A


Clark, Rt Hon Dr David (S Shields)
Godsiff, Roger


Clark, Paul (Gillingham)
Goggins, Paul


Clarke, Charles (Norwich S)
Gordon, Mrs Eileen


Clarke, Eric (Midlothian)
Griffiths, Jane (Reading E)


Clarke, Rt Hon Tom (Coatbridge)
Griffiths, Nigel (Edinburgh S)


Clarke, Tony (Northampton S)
Griffiths, Win (Bridgend)


Clelland, David
Grocott, Bruce


Clwyd, Ann
Grogan, John


Coaker, Vernon
Gunnell, John


Coffey, Ms Ann
Hall, Mike (Weaver Vale)


Coleman, Iain
Hall, Patrick (Bedford)


Colman, Tony
Hamilton, Fabian (Leeds NE)


Connarty, Michael
Harman, Rt Hon Ms Harriet


Cook, Frank (Stockton N)
Heal, Mrs Sylvia


Cooper, Yvette
Healey, John


Corbett, Robin
Henderson, Doug (Newcastle N)


Corbyn, Jeremy
Henderson, Ivan (Harwich)


Corston, Ms Jean






Hepburn, Stephen
Marek, Dr John


Heppell, John
Marsden, Gordon (blackpool S)


Hesford, Stephen
Marsden, Paul (Shrewsbury)


Hewitt, Ms Patricia
Marshall, David (Shettleston)


Hinchliffe, David
Marshall, Jim (Leicester S)


Hoey, Kate
Marshall—Andrews, Robert


Home Robertson, John
Martlew, Eric


Hoon, Geoffrey
Meacher, Rt Hon Michael


Hope, Phil
Meale, Alan


Hopkins, Kelvin
Merron, Gillian


Howarth, George (Knowsley N)
Michie, Bill (Shef'ld Heeley)


Howells, Dr Kim
Miller, Andrew


Hoyle, Lindsay
Mitchell, Austin


Hughes, Ms Beverley (Stretford)
Moonie, Dr Lewis


Hughes, Kevin (Doncaster N)
Moran, Ms Margaret


Humble, Mrs Joan
Morgan, Ms Julie (Cardiff N)


Hurst, Alan
Morgan, Rhodri (Cardiff W)


Hutton, John
Morley, Elliot


Iddon, Dr Brian
Morris, Ms Estelle (B'ham Yardley)


Illsley, Eric
Mountford, Kali


Ingram, Adam
Mullin, Chris


Jackson, Ms Glenda (Hampstead)
Murphy, Denis (Wansbeck)


Jackson, Helen (Hillsborough)
Naysmith, Dr Doug


Jamieson, David
O'Brien, Bill (Normanton)


Jenkins, Brian
O'Brien, Mike (N Warks)


Johnson, Alan (Hull W & Hessle)
O'Hara, Eddie


Johnson, Miss Melanie (Welwyn Hatfield)
Olner, Bill


Jones, Barry (Alyn & Deeside)
O'Neill, Martin


Jones, Mrs Fiona (Newark)
Organ, Mrs Diana


Jones, Helen (Warrington N)
Palmer, Dr Nick


Jones, Ms Jenny (Wolverh'ton SW)
Pearson, Ian


Jones, Martyn (clwyd S)
Pendry, Tom


Jowell, Ms Tessa
Perham, Ms Linda


Keeble, Ms Sally
Pickthall, Colin


Keen, Ann (Brentford & Isleworth)
Pike, Peter L


Kelly, Ms Ruth
Plaskitt, James


Kemp, Fraser
Pond, Chris


Kennedy, Jane (Wavertree)
Pope, Greg


Khabra, Piara S
Pound, Stephen


Kidney, David
Powell, Sir Raymond


Kilfoyle, Peter
Prentice, Ms Bridget (Lewisham E)


King, Andy (Rugby & Kenilworth)
Prentice, Gordon (Pendle)


King, Ms Oona (Bethnal Green)
Prescott, Rt Hon John


Kingham, Ms Tess
Primarolo, Dawn



Kumar, Dr Ashok
Prosser, Gwyn


Ladyman, Dr Stephen
Purchase, Ken


Lawrence, Ms Jackie
Quin, Ms Joyce


Laxton, Bob
Quinn, Lawrie


Lepper, David
Rammell, Bill


Leslie, Christopher
Rapson, Syd


Levitt, Tom
Raynsford, Nick


Lewis, Ivan (bury S)
Reed, Andrew (Loughborough)


Lewis, Terry (Worsley)
Reid, Rt Hon Dr John (Hamilton N)


Linton, Martin
Robertson, Rt Hon George (Hamilton S)


Lloyd, Tony (Manchester C)
Robinson, Geoffrey (Cov'try NW)


Lock, David
Roche, Mrs Barbara


McAvoy, Thomas
Rooney, Terry


McCabe, Steve
Ross, Ernie (Dundee W)


McCafferty, Ms Chris
Rowlands, Ted


McCartney, Ian (Makerfield)
Ruane, Chris


McDonagh, Siobhain
Russell, Ms Christine (Chester)


McDonnell, John
Ryan, Ms Joan


McGuire, Mrs Anne
Salter, Martin


McIsaac, Shona
Savidge, Malcolm


McKenna, Mrs Rosemary
Sawford, Phil


Mackinlay, Andrew
Sedgemore, Brian


McNulty, Tony
Shaw, Jonathan


MacShane, Denis
Sheerman, Barry


Mactaggart, Fiona
Sheldon, Rt Hon Robert


McWalter, Tony
Shipley, Ms Debra


McWilliam, John
Short, Rt Hon Clare


Mahon, Mrs Alice
Simpson, Alan (Nottingham S)


Mallaber, Judy
Singh, Marsha


Mandelson, Rt Hon Peter
Skinner, Dennis



Smith, Rt Hon Andrew (Oxford E)






Smith, Angela (Basildon) 
Trickett, Jon


Smith, Miss Geraldine (Morecambe & Lunesdale)
Turner, Dennis (Wolverh'ton SE)


Smith, Jacqui (Redditch)
Turner, Dr Desmond (Kemptown)


Smith, John (Glamorgan)
Turner, Dr George (NW Norfolk)


Smith Llew (Blaenau Gwent)
Twigg, Derek (Halton)


Snape, Peter
Twigg, Stephen (Enfield)


Soley, Clive
Vis, Dr Rudi 


Southworth, Ms Helen 
Walley, Ms Joan


Spellar, John
Wareing, Robert N


Squire, Ms Rachel
Watts, David 


Starkey, Dr Phyllis
White, Brian


Steinberg, Gerry
Whitehead, Dr Alan


Stevenson, George
Wicks, Malcolm


Stewart, David (Inverness E)
Williams, Rt Hon Alan (Swansea W)


Stewart, Ian (Eccles)
Williams, Alan W (E Carmarthen)


Stinchcombe, Paul
Wills, Michael


Stoate, Dr Howard
Winnick, David


Strang, Rt Hon Dr Gavin 
Winterton, Ms Rosie (Doncaster C) 


Stringer, Graham
Wise, Audrey


Sutcliffe, Gerry
Wood, Mike


Taylor, Rt Hon Mrs Ann (Dewsbury)
Woolas, Phil


Temple—Morris, Peter
Worthington, Tony



Thomas, Gareth R (Harrow W)
Wray, James


Timms, Stephen
Wright, Dr Tony (Cannock)


Tipping, Paddy



Touhig, Don
Tellers for the Noes:



Mr. David Hanson and



Mr. Keith Hill.

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31 (Questions on amendments):—

The House divided: Ayes 332, Noes 155.

Division No. 36]
[10.12 pm


AYES


Abbott, Ms Diane
Burden, Richard


Adams, mrs Irene (Paisley N)
Burgon, Colin


Ainger, Nick
Butler, Mrs Christine


Ainsworth, Robert (Cov'try NE)
Caborn, Richard


Allen, Graham
Campbell, Alan (Tynemouth)


Anderson, Donald (Swansea E)
Campbell, Mrs Anne (C'bridge)


Armstrong, Ms Hilary
Campbell, Ronnie (Blyth V)


Ashton, Joe
Campbell—Savours, Dale


Atherton, Ms Candy
Casele, Roger


Atkins, Charlotte
Caton, Martin


Austin, John
Cawsey, Ian


Banks, Tony
Chapman, Ben (Wirral S)


Barnes, Harry
Chisholm, Malcolm


Battle, John
Clapham, Michael


Bayley, Hugh
Clark, Rt Hon Dr David (S Shields)


Beard, Nigel
Clark, Paul (Gillingham)


Beckett, Rt Hon Mrs Margaret
Clarke, Charles (Norwich S)


Bell, Martin (Tatton)
Clarke, Eric (Midlothian)


Bell, Stuart (Middlesbrough)
Clarke, Rt Hon Tom (Coatbridge)


Benn, Rt Hon Tony
Clarke, Tony (Northampton S)


Bennett, Andrew F
Clelland, David


Benton, Joe
Clwyd, Ann


Bermingham, Gerald
Coaker, Vernon


Berry, Roger
Coffey, Ms Ann


Best, Harold
Coleman, Iain


Betts, Clive
Colman, Tony


Blears, Ms Hazel
Connarty, Michael


Blizzard, Bob
Cook, Frank (Stockton N)


Boateng, Paul
Cooper, Yvette


Borrow, David
Corbett, Robin


Bradley, Keith (Withington)
Corbyn, Jeremy


Bradley, Peter (The Wrekin)
Corston, Ms Jean


Brinton, Mrs Helen
Cousins, Jim


Browne, Desmond
Cranston, Ross


Buck, Ms Karen
Crausby, David





Cryer, Mrs Ann (Keighley)
Howells, Dr Kim


Cryer, John (Hornchurch)
Hoyle, Lindsay


Cummings, John
Hughes, Ms Beverley (Stretford)


Cunliffe, Lawrence
Hughes, Kevin (Doncaster)


Cunningham, Rt Hon Dr Jack (Copeland)
Humble, Mrs Joan


Cunningham, Jim (Cov'try S)
Hurst, Alan


Dalyell, Tam
Hutton, John


Darvill, Keith
Iddon, Dr Brian


Davey, Valerie (Bristol W)
Illsley, Eric


Davies, Rt Hon Denzil (Llanelli)
Ingram, Adam


Davies, Geraint (Croydon C)
Jackson, Ms Glenda (Hampstead)


Davies, Rt Hon Ron (Caerphilly)
Jackson, Helen (Hillsborough)


Dawson, Hilton
Jamieson, David


Dean, Mrs Janet
Jenkins, Brian


Denham, John
Johnson, Alan (Hull W & Hessle)


Dismore, Andrew
Johnson, Miss Melanie (Welwyn Hatfield)


Dobbin, Jim
Jones, Barry (Alyn & Deeside)


Dobson, Rt Hon Frank
Jones, Mrs Fiona (Newark)


Donohoe, Brian H
Jones, Helen (Warrington N)


Doran, Frank
Jones, Ms Jenny (Wolverh'ton SW)


Dowd, Jim
Jones, Martyn (Clwyd S)


Dunwoody, Mrs Gwyneth
Jowell, Ms Tessa


Eagle, Angela (Wallasey)
Keeble, Ms Sally


Eagle, Maria (L'pool Garston)
Keen, Ann (Brentford & lsleworth)


Edwards,Huw
Kelly, Ms Ruth


Efford, Clive
Kemp, Fraser


Ellman, Mrs Louise
Kennedy, Jane (Wavertree)


Fatchett, Derek
Khabra, Piara S


Field, Rt Hon Frank
Kidney, David


Fisher, Mark
Kilfoyle, Peter


Fitzpatrick, Jim
King, Andy (Rugby & Kenilworth)


Fitzsimons, Lorna
King, Ms Oona (Bethnal Green)


Flint, Caroline
Kingham, Ms Tess


Flynn, Paul
Kumar, Dr Ashok


Follett, Barbara
Ladyman, Dr Stephen


Foster, Rt Hon Derek
Lawrence, Ms Jackie


Foster, Michael Jabez (Hastings)
Laxton, Bob


Foster, Michael J (Worcester)
Lepper, David


Foulkes, George
Leslie, Christopher


Fyfe, Maria
Levitt, Tom


Gapes, Mike
Lewis, Ivan (Bury S)


Gardiner, Barry
Lewis, Terry (Worsley)


Gerrard, Neil
Linton, Martin


Gibson, Dr Ian
Lloyd, Tony (Manchester C)


Gilroy, Mrs Linda
Lock, David


Godman, Dr Norman A
McAvoy, Thomas


Godsiff, Roger
McCabe, Steve


Goggins, Paul
McCafferty, Ms Chris


Gordon, Mrs Eileen
McCartney, Ian (Makerfield)


Griffiths, Jane (Reading E)
McDonagh, Siobhain


Griffiths, Nigel (Edinburgh S)
McDonnell, John


Griffiths, Win (Bridgend)
McGuire, Mrs Anne


Grocott, Bruce
McIsaac, Shona


Grogan, John
McKenna, Mrs Rosemary


Gunnell, John
Mackinlay, Andrew


Hall, Mike (Weaver Vale)
McNulty, Tony


Hall, Patrick (Bedford)
MacShane, Denis


Hamilton, Fabian (Leeds NE)
Mactaggart, Fiona


Harman, Rt Hon Ms Harriet
McWafter, Tony


Heal, Mrs Sylvia
McWilliam, John


Healey, John
Mahon, Mrs Alice


Henderson, Doug (Newcastle N)
Mallaber, Judy


Henderson, Ivan (Harwich)
Mandelson, Rt Hon Peter


Hepburn, Stephen
Marek, Dr John


Heppell, John
Marsden, Gordon (Blackpool S)


Hesford, Stephen
Marsden, Paul (Shrewsbury)


Hewitt, Ms Patricia
Marsden, David (Shettleston)


Hinchliffe, David
Marshall, Jim (Leicester S)


Hoey, Kate
Marshall—Andrews, Robert


Home Robertson, John
Martlew, Eric


Hoon, Geoffrey
Meacher, Rt Hon Michael


Hope, Phil
Meale, Alan


Hopkins, Kelvin
Merron, Gillian


Howarth, George (Knowsley N)
Michie, Bill (Shef'ld Heeley)






Miller, Andrew
Short, Rt Hon Clare


Mitchell, Austin
Simpson, Alan (Nottingham S)


Moonie, Dr Lewis
Skinner, Dennis


Moran, Ms Margaret
Smith, Rt Hon Andrew (Oxford E)


Morgan, Ms Julie (Cardiff N)
Smith, Angela (basildon)


Morgan, Rhodri (cardiff W)
Smith, Miss Geraldine (Morecambe & Lunesdale)


Morley, Elliot
Smith, Jacqui (Redditch)


Morris, Ms Estelle (B'ham Yardley)
Smith, John (Glamorgan)


Mountford, Kali
Smith, Llew (Blaenau Gwent)


Mullin, Chris
Snape, Peter


Murphy, Denis (Wansbeck)
Soley, Clive


O'Brien, Bill (Normanton)
Southworth, Ms Helen


O'Brien, Mike (N Warks)
Spellar, John


O'Hara, Eddie
Squire, Ms Rachel


Olner, Bill
Starkey, Dr Phyllis


O'Neill, Martin
Steinberg, Gerry


Organ, Mrs Diana
Stevenson, George


Palmer, Dr Nick
Stewart, David (Inverness E)


Pearson, Ian
Stewart, Ian (Eccles)


Pendry, Tom
Stoate, Dr Howard


Perham, Ms Linda
Strang, Rt Hon Dr Gavin


Pickthall, Colin
Stringer, Graham


Pike, Peter L
Sutcliffe, Gerry


Plaskitt, James
Taylor, Rt Hon Mrs Ann (Dewsbury)


Pollard, Kerry
Taylor, David (NW Leics)


Pond, Chris
Temple—Morris, Peter


Pope, Greg
Thomas, Gareth R (Harrow W)


Pound, Stephen
Timms, Stephen


Powell, Sir Raymond
Tipping, Paddy


Prentice, Ms Bridget (Lewisham E)
Touhig, Don


Prentice, Gordon (Pendle)
Trickett, Jon


Prescott, Rt Hon John
Turner, Dennis (Wolverh'ton SE)


Primarolo, Dawn
Turner, Dr Desmond (Kemptown)


Prosser, Gwyn
Turner, Dr George (NW Norfolk)


Purchase, Ken
Twigg, Derek (Halton)


Quin, Ms Joyce
Twigg, Stephen (Enfield)


Quinn, Lawrie
Vis, Dr Rudi


Rammell, Bill
Walley, Ms Joan


Rapson, Syd
Wareing, Robert N


Raynsford, Nick
Watts, David


Reed, Andrew (Loughborough)
White, Brian


Reid, Rt Hon Dr John (Hamilton N)
Whitehead, Dr Alan


Robertson, Rt Hon George (Hamilton S)
Wicks, Malcolm


Robinson, Geoffrey (Cov'try NW)
Williams, Rt Hon Alan (Swansea W)


Roche, Mrs Barbara
Williams, Alan W (E Carmarthen)


Rooney, Terry
Wills, Michael


Ross, Ernie (Dundee W)
Winnick, David


Rowlands, Ted
Winterton, Ms Rosie (Doncaster C)


Ruane, Chris
Wise, Audrey


Russell, Ms Christine (Chester)
Wood, Mike


Ryan, Ms Joan
Woolas, Phil


Salter, Martin
Worthington Tony


Savidge, Malcolm
Wray, James


Sawford, Phil
Wright, Dr Tony (Cannock)


Sedgemore, Brian



Shaw, Jonathan
Tellers for the Ayes:


Sheerman, Barry
Mr. David Hanson and


Sheldon, Rt Hon Robert
Mr. Keith Hill


Shipley,Ms Debra



NOES


Ainsworth, Peter (E Surrey)
Boswell, Tim


Allan, Richard
Brazier, Julian


Amess, David
Breed, Colin


Ancram, Rt Hon Michael
Brooke, Rt Hon Peter


Arbuthnot, Rt Hon James
Browning, Mrs Angela


Ashdown, Rt Hon Paddy
Bruce, Ian (S Dorset)


Atkinson, Peter (Hexham)
Burnett, John


Baker, Norman
Burns, Simon


Baldry, Tony
Cash, William


Beith, Rt Hon A J
Chapman, Sir Sydney (Chipping Barnet)


Bercow, John
Chope, Christopher


Beresford, Sir Paul
Clappison, James


Body, Sir Richard






Clark, Rt Hon Alan (Kensington)
Major, Rt Hon John


Clarke, Rt Hon Kenneth (Rushcliffe)
Malins, Humfrey


Clifton—Brown, Geoffrey
Maples, John


Cormack, Sir Patrick
Mates, Michael


Cran, James
Mawhinney, Rt Hon Sir Brian


Davey, Edward (Kingston)
May, Mrs Theresa


Davis, Rt Hon David (Haltemprice)
Michie, Mrs Ray (Argyll & Bute)


Day, Stephen
Moore, Michael


Dorrell, Rt Hon Stephen
Moss, Malcolm


Duncan, Alan
Nicholls, Patrick


Duncan Smith, Iain
Öpik, Lembit



Ottaway, Richard


Emery, Rt Hon Sir Peter
Page, Richard


Evans, Nigel
Paterson, Owen


Faber, David
Pickles, Eric


Fallon, Michael
Prior, David


Flight, Howard
Randall, John


Forth, Rt Hon Eric
Redwood, Rt Hon John


Foster, Don (Bath)
Rendel, David


Fox, Dr Liam
Robathan, Andrew


George, Andrew (St Ives)
Robertson, Laurence (Tewk'b'ry)


Gibb, Nick
Roe, Mrs Marion (Broxbourne)


Gill, Christopher
Rowe, Andrew (Faversham)


Gillan, Mrs Cheryl
Russell, Bob (Colchester)


Gorrie, Donald
Sanders, Adrian


Gray, James
Sayeed, Jonathan


Green, Damian
Simpson, Keith (Mid-Norfolk)


Greenway, John
Smith, Sir Robert (W Ab'd'ns)


Grieve, Dominic
Soames, Nicholas


Gummer, Rt Hon John
Spelman, Mrs Caroline


Hague, Rt Hon William
Spicer, Sir Michael


Hamilton, Rt Hon Sir Archie
Spring, Richard


Hammond, Philip
Stanley, Rt Hon Sir John


Harris, Dr Evan
Streeter, Gary


Hawkins, Nick
Stunell, Andrew


Hayes, John
Swayne, Desmond


Heald, Oliver
Syms, Robert


Heath, David (Somerton & Frome)
Tapsell, Sir Peter


Heathcoat—Amory, Rt Hon David
Taylor, Ian (Esher & Walton)


Hogg, Rt Hon Douglas
Taylor, Matthew (Truro)


Horam, John
Taylor, Sir Teddy


Howard, Rt Hon Michael
Tonge, Dr Jenny


Howarth, Gerald (Aldershot)
Townend, John


Hunter, Andrew
Tredinnick, David


Jack, Rt Hon Michael
Trend, Michael


Jenkin, Bernard
Tyler, Paul


Jones, Nigel (Cheltenham)
Tyrie, Andrew


Kennedy, Charles (Ross Skye)
Viggers, Peter


Key, Robert
Wallace, James


Kirkbride, Miss Julie
Walter Robert


Laing, Mrs Eleanor
Wardle, Charles


Lait, Mrs Jacqui
Webb, Steve


Lansley, Andrew
Wells, Bowen


Leigh, Edward
Whitney, Sir Raymond


Letwin, Oliver
Whittingdale, John


Lewis, Dr Julian (New Forest E)
Widdecombe, Rt Hon Miss Ann


Lidington, David
Wilkinson, John


Lilley, Rt Hon Peter
Willetts, David


Lloyd, Rt Hon Sir Peter (Fareham)
Willis, Phil




Wilshire, David


Loughton, Tim
Winterton, Mrs Ann (Congleton)


Luff, Peter
Winterton, Nicholas (Macclesfield)


McIntosh, Miss Anne
Yeo, Tim


MacKay, Rt Hon Andrew
Young, Rt Hon Sir George


Maclean, Rt Hon David



Maclennan, Rt Hon Robert
Tellers for the Ayes:


McLoughlin, Patrick
Mr. John M. Taylor and


Madel, Sir David
Mr. Time Collins.


MR. DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Question accordingly agreed to.

Resolved,
That this notes that the fundamental reform of company taxation carried out by the Government has removed major company taxation distortions from the system and put in place a sound base for better


quality investment and growth that will lead to greater prosperity for everyone in the UK, including pensioners; that the Government has taken significant steps to help pensioners, including a guaranteed minimum income for the poorest pensioners through an increase in Income Support from this April worth over £236 extra per year for single pensioners and over £377 extra for couples, a minimum guarantee on tax so that pensioners have no income tax to pay unless their income rises above a certain level, £20 of winter fuel payments for every pensioner household, the introduction of free eye tests for pensioners from this April, new travel concessions on public transport and an extra £21 billion invested in the National Health Service; and further notes that this contrasts sharply with the record of the previous Government which introduced VAT on fuel at 8% and tried to increase it to 17.5%, which introduced charges of eye tests for pensioners, which presided over the mis-selling of pensions which severely damaged the financial security of many pensioners, which ran down the National Health Service on which many pensioners rely, and which was responsible for boom and bust economics which eroded the real value of pensioners' savings through inflation exceeding 10%.

WELSH AFFAIRS COMMITTEE

Ordered,
That Ms Jackie Lawrence be discharged from the Welsh Affairs Committee and Mr. Chris Ruane be added to the Committee.—[Mr. Mc William, on behalf of the Committee of Selection.]

PETITION

Wing Bypass

Mr. John Bercow: I am delighted to present a petition on behalf of 1,800 people who reside in the parish of Wing in Buckinghamshire. The petition
Declares that a government inquiry in 1993 concluded that a bypass on the Outer Northern Route was the most suitable solution to the traffic situation in Wing.
The Petitioners therefore request that the House of Commons urge the Secretary of State for the Environment, Transport and the Regions to order study work to commence for such a bypass and to inform the Petitioners of when such a bypass will be constructed.
To lie upon the Table.

Telecommunication Installations

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Dowd.]

Mr. Phil Willis: This Adjournment debate, for which I am extremely grateful, gives me an opportunity to recognise the efforts of a group of Castle Hill residents in my constituency. For some 30 days, they took part in what is known locally as the seige of Whinney lane, to prevent Orange Communications plc erecting a new telecommunications mast. They were protesting not simply about a mast that spoils their environment, although that is precisely what it does, but about a planning and public health system that had let them down.
Permission for the mast had been gained using permitted development rights. There was no site notice, no public consultation, and not even consultation with locally elected councillors. The first local residents knew that something was about to happen was when a bulldozer ripped out a listed hedgerow and began work on the site. Is that an isolated experience? No, it has been replicated throughout the United Kingdom. At Stormont recently, I shared similar experiences with residents of Northern Ireland.
If hon. Members want to discover the extent of the concern about legislation governing the erection of telecommunications masts, they need look no further than their own experiences in the House. Since 1 May 1997, 88 written questions on the issue have been tabled to the Department of the Environment, Transport and the Regions, and three Adjournment debates and three early-day motions, which have attracted 91 signatures so far, have focused on the matter. In addition, the DETR has completed one consultation paper, "Telecommunications Development Control", and launched another in conjunction with the Department of Health.
I should make it clear to the Minister that I recognise that the current legislation and, indeed, current policy guidelines, were in place prior to 1997. I am not therefore trying to make any party political point. Nor do I seek to undermine the telecommunications industry, whose technological developments are essential to modern communications.

Dr. Evan Harris: I am grateful to my hon. Friend, whom I alerted to my wish to make the point that permitted development rights have come up in Adjournment debates before, with respect to Railtrack. Perhaps the Government need to take a wider view on whether they should reform the right of private companies to use such wide-ranging rights, certainly given my experience of problems in Radley road in Abingdon and Bagley Wood road in Kennington, where green-belt planning decisions in the latter case and good neighbourliness have been overridden.

Mr. Willis: I am grateful to my hon. Friend for his broad consensus on permitted development rights.
It is my belief that planning policy, especially the use of part 24 of the Town and Country Planning (General Permitted Development) Order 1995, is weighted too much in favour of the industry and not of the environment


and public health. The proposed guidance announced on 16 November, which extends consultation from 28 to 42 days, is still inadequate. I hope that I can persuade him to think again. It is interesting that his proposal to extend the consultation period has been warmly welcomed by the industry but not by any environmental or public health group.
Although I do not want to be alarmist, I hope that the Minister agrees that neither his Department nor the Department of Health can categorically state that telecommunications masts and mobile phones do not pose a threat to public health.

Mr. Andrew Reed: I know that the hon. Gentleman is aware of the case in Shepshed in my constituency, where a telecommunications mast is only about 25 m away from the rear of a series of properties. Does he agree that, even if there is no proven case either way, the perception at this stage—fear of the long-term implications and health fears regarding telecommunications masts—needs to be taken into account in legislation?

Mr. Willis: The hon. Gentleman makes an excellent point. Quite often, the fear—a fear of something that has not been proven one way or another—causes a great deal of concern and stress.

Ms Jackie Lawrence: I know of a similar instance in my constituency. What concerns me—I wonder whether my hon. Friend shares this concern—is the fact, which has been brought to my attention, that the National Radiological Protection Board is becoming increasingly isolated in its approach to the levels of radiation to which it is prepared to allow the public to be exposed. In some instances, that level is seven times greater than the level suggested by the International Commission on Non-Ionising Radiation Protection. Does he agree that it is especially worrying that, apparently, the consultants employed by the NRPB are also employed by the telecommunications industry, notably Orange, and that that is a matter of general, desperate, concern on public health grounds?

Mr. Willis: I am grateful to the hon. Lady for describing me as her hon. Friend; I hope that I am that in this matter, because I believe that the issue unites hon. Members throughout the House. I believe that there is general concern that some of the organisations that we expect to protect us and give us advice are in dispute with one another, and that the industry often uses them to support its case when making planning applications—although I do not believe that the latter is necessarily a bad thing, provided that the rules are clear and above board at the start of the process. I shall return to that subject.
After recent findings on smoking, passive smoking, asbestos and Creutzfeldt-Jakob disease, any Minister would be foolish to rule out the possibility of a health risk. However, I equally accept that it is almost impossible to prove that telecommunication masts are safe. The Government's task is to assess the degree of risk to the public. The potential risk from telecommunication masts forms the basis of the argument that I shall make tonight for a change in the law.
To date, much research has been conducted on the thermal effects of microwaves as part of the electromagnetic spectrum. There is proof that, at sufficient power and frequency, such waves can cause damage at the tissue, cell and molecular levels. However, although evidence exists to suggest that the public are relatively safe from the thermal effects of electromagnetic waves in the radio frequency used by mobile phone operators, there is insufficient evidence to calculate the level of risk from biological effects.

Mr. Andrew Stunell: Will my hon. Friend give way?

Mr. Willis: I will, for the last time.

Mr. Stunell: I thank my hon. Friend, and I am sorry to trespass on his time; I shall do so only briefly. I draw his attention to the situation in my constituency where, overnight, a mast was erected in a back yard overlooking 25 terraced houses. The transmitting antennae are less than 50 ft from the nearest bedroom window. The mast is an eyesore and—more to the point—it raises serious health concerns. I very strongly support the plea that he brings to the House tonight.

Mr. Willis: My hon. Friend makes a very good point. There is general guidance that, in the United Kingdom, masts should be sited 150 m from residential properties, but that guidance is being openly flouted in the desire to put up masts and fight off the competition. It is a real issue, which I believe the Government must address.
I was speaking about the biological effects of microwaves, especially radio frequency waves at the very low frequencies used in mobile phones and transmissions from mobile telecommunications masts. Increasing evidence suggests that low-frequency magnetic fields and low-frequency microwave radiation arise from the constantly pulsating signal of mobile phone masts, and that their proximity to electromagnetic fields encountered naturally causes potential biological damage. So concerned are countries worldwide—including the United States of America, Australia, New Zealand, Denmark, Sweden and, of course, the European Union—that the World Health Organisation has set up an in-depth study into the biological effects of low-frequency microwaves. I am pleased that the UK Government have supported the research enthusiastically and are among its leading supporters across the world. So far, research using animals to assess the biological effects has demonstrated cell stress, enzyme activity, genetic effects, gene transcription and hormone production. The biological changes seen in cells, tissues and organisms are similar to changes seen in degenerative diseases such as cancer, leukaemia, Alzheimer's disease and Parkinson's disease.
Dr. Michael Repacholi of the World Health Organisation, a leading expert in the field, and Dr. Russell of the US Food and Drugs Administration, said at a conference in Dublin on 6 March 1998 that until the current WHO research is complete, "the jury is out" on the health risks from low-level electromagnetic fields.
Henry Lai, the research professor in bioengineering at the university of Washington, another leading research


figure, stated in a recent letter to Halsey Meyer Higgins, a major London law firm currently involved in litigation over the health issue:
People who live close to masts are constantly being exposed to the radiation for months or years. Even though the level is low it would matter if the effects of RFR turn out to be cumulative. Small doses cumulate over a long period of time and will eventually lead to harmful effects.
That is the view of the world's leading expert.
In a press release issued by the WHO in December 1997, in which it announced the research project into EMF exposure, Dr. Paul Kleihues, director of WHO's international agency for research on cancer, stated:
With an estimated 15 million new cancer cases each year by the year 2020, we must know if exposure to EMF is contributing to any significant extent to the incidence of the disease".
If the World Health Organisation can take seriously the possible effects of mobile telephone masts, so should Parliament.
In the United States, 39 states have stopped erecting masts until the authorities have greater confidence in the technology. In Australia, the siting of cell tower masts less than 500 m from schools, homes and hospitals has been banned. A draft European Union recommendation on limitation of public exposure to electromagnetic fields is under consideration.
I am not suggesting that the Government should order every mobile telephone mast to be pulled down tomorrow, or that the telecommunications industry should stop applying to erect new masts. What I am suggesting, and what the WHO is suggesting, is a cautionary approach. That would be in line with our obligations under the Maastricht treaty, which introduced the precautionary principle as a legal obligation in article 130-r(2) of the treaty of Rome. The fact that since the UK signed the Maastricht treaty PPG8 has not been amended could well give rise to a challenge in the European courts.
What can be done to support the precautionary principle? I ask the Minister to consider five proposals. First, PPG8 should be amended to restore the balance against the industry and in favour of the general public. According to section (5) of PPG8:
The Government's General Policy on telecommunications is to facilitate the growth of new and existing systems.
That advice is probably the most heavily weighted Government guidance to local planning authorities. That probably explains why, even when planning authorities refuse applications, 47 per cent. of them are granted at appeal by the Secretary of State, compared with only 33 per cent. of all other planning applications.
It is no use the Minister saying that planning authorities have the opportunity to exercise control over the individual siting of mast developments. They do not. Given the public concerns about health and the environment, such policy objective imbalance is surely unacceptable.
The second proposal is to remove permitted development rights for all applications for new masts. Already one company, One2One, has agreed to give up its permitted development rights. If that company can do so and continue to compete in the market, surely others can, too. Such a measure would immediately restore public confidence in the justice of the planning system. It would enable local residents and elected members adequately to consider the merits of each application,

give operators greater incentive to negotiate with local communities and the planning authority, and still allow operators a right of appeal to the Secretary of State.
My third proposal would make mandatory the requirement for local planning authorities to have as part of their development plan a detailed telecommunications planning policy. Currently, PPG8 recommends such inclusions without making them obligatory. Local authorities should be obliged to maintain on the plan details of all current installations, including their power, frequency and coverage. That would give added protection against the cumulative effects of multi-installations using a single mast and pave the way for assessing need.
My fourth proposal would be an essential part of the development control process. All applications should be subject to an independent assessment of need before determination. At present, the operator can justify need without any external verification. Few, if any, local authorities carry specialists who are able to assess a case of need. Why can Cellnet achieve 99 per cent. coverage across the United Kingdom using 2,400 masts, while one of its competitors needs more than 4,000? An independent assessment financed by the operator as part and parcel of the planning application would show the public that need had been independently assessed.
My fifth proposal is the most crucial. Each application should be accompanied by a health risk assessment financed by the applicant and produced by the National Radiological Protection Board. The hon. Member for Preseli Pembrokeshire (Ms Lawrence) may disagree with that, but it is one of the only organisations that could give a local authority an independent health risk assessment.
The NRPB's role is to assess risk. Although it is reassessing its guidance in the light of public concern, I believe that an assessment by it would give added security to local communities.
The debate has given me an opportunity to present the concerns of my constituents in Harrogate and Knaresborough. My proposals mirror their concerns and those of hon. Members who have had the courtesy to stay in the Chamber to listen to the debate. These proposals are not against the telecommunications industry, but they represent a cautionary approach to future development.
At present, the jury is out on the health risks. How much better to say in five years that we were right to be cautious than to have another BSE-type problem heaped upon us.

The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Nick Raynsford): I congratulate the hon. Member for Harrogate and Knaresborough (Mr. Willis) on securing this Adjournment debate and giving the House an opportunity to discuss an important matter that causes concern to many people. They feel quite reasonable anxiety about the environmental and the health impact of telecommunication masts erected in their vicinity.
The growth in the mobile communications sector over the past 15 years has been remarkable. There are more than 13 million mobile phone subscribers in the United Kingdom; in other words, more than one in five of the population has a mobile phone. Some analysts expect that figure to rise to about 30 million subscribers—one in two of the population—by 2003.
An efficient and modern telecommunications network offers a number of significant social and economic benefits, helping to create a climate conducive to business development and providing ready access to a growing range of services in urban and rural areas.
The technical constraints of cellular radio networks—the need to have a line of sight between handsets and base stations, for example—means that providing the necessary infrastructure represents a considerable challenge. In meeting that challenge, it is important that we continue to strive to minimise the environmental impact of the new installations.

Mr. Bob Russell: Will the Minister give way?

Mr. Raynsford: I do not have time to give way, as unfortunately, I have been given only 12 minutes to reply. I must press ahead if I am to do justice to the comments of the hon. Member for Harrogate and Knaresborough.
The Government's policy for telecommunications development is to strike a balance between the provision of a competitive national telecommunications network and the protection of our environment. That is reflected in the planning policy guidance on telecommunication development set out in planning policy guidance note 8. We are fully committed to our environmental objectives and established national policies for the protection of the countryside and residential areas.
It may be helpful if I explain the background to the licensing of radio-based telecommunications operators. The network operators are licensed by the Secretary of State for Trade and Industry under section 7 of the Telecommunications Act 1984 to provide mobile radio telecommunication services. In order to help them to do that, they are granted telecommunications code powers.
As licensed code system operators, cellular operators are given permitted development rights under part 24 of the Town and Country Planning (General) Permitted Development Order 1995. Under the GPDO, operators have the right to carry out certain types of development without the need to apply to the local planning authority for planning permission. Some development permitted in this way, such as the erection of a mast up to 15 m in height, is, however, subject to a condition that requires the operator to satisfy a prior approval procedure. Under that procedure, the local planning authority has the opportunity to say whether it wishes to approve, within 28 days, details of the installation's siting and appearance. The authority is able to refuse approval if it considers that the development will pose a serious threat to amenity.
It is important that operators recognise that the selection of sites for the erection of masts may raise a number of sensitive issues. That is particularly true of residential areas. Appendix E to environment circular 9/95, in suggesting the sort of considerations that might need to be taken into account in addressing a mast's siting under the GPDO provisions, refers to the site in relation to residential property. Further guidance on this aspect is included in the code of best practice on telecommunications prior approval procedures as applied to mast or tower development, which is published by our Department. Copies of that document are available in the Library.
I commend the code, which was prepared by a joint working party of local authority representatives and the principal telecommunications code system operators, as a basis for best practice. It provides guidance on how local planning authorities and operators can co-operate to make it easier for prior approval applications to be dealt with effectively within the time allowed under the GPDO.
As well as providing guidance on the operator's practice, the code examines the local planning authority's role. It is important that local authorities understand the constraints within which telecom companies operate, and assist them in finding pragmatic solutions. The planning authorities' local knowledge is vital in that process. The control of development, such as telecommunication masts, does not rely simply on responding to planning applications. PPG8 sets out a number of positive steps that local planning authorities can take to help shape telecommunications development in their area. As to the hon. Gentleman's third proposal, we expect local authorities to include clear policies on telecommunications in their development plans, which are adopted after opportunities for public involvement in their preparation.
The guidance also makes clear the importance we attach to close consultation between operators and local planning authorities before making any application for consent to install telecommunications apparatus. Pre-application discussion will assist both sides in understanding the constraints within which the other is working, and exploring possible alternatives for mast siting and design. Although not a statutory requirement, the Department encourages publicity for prior approval applications so that people likely to be affected by the proposed development can make their views known to the authority. Many of these working practices are set down in the code of best practice.
We want to avoid the situation highlighted by the hon. Gentleman—it occurred in his constituency—in which local residents are unaware of a proposed mast installation until work commences. For that reason, we made proposals in our consultation paper "Telecommunications Development Control", which was published for public comment in July. In that paper, we said that we considered that the use of permitted development rights continued to be appropriate, but that there was scope for improving procedures to address a number of concerns. A major concern was the need to allow for greater public consultation over the siting and design of masts erected under the GPDO. A wide range of respondents to the consultation paper were highly supportive of the principle of increasing the opportunity for public comment.
In November, the Minister for the Regions, Regeneration and Planning announced his intention to extend the prior approval notice period to 42 days for ground-based masts. That announcement was intended to ensure that local authorities would have sufficient time to consult local communities on the siting and appearance of proposed mast installations at the outset.
We intend to place a statutory obligation on the operators to erect a site notice to publicise the development proposed. That will advise local people of the proposed development, and enable them to make their views known to the local authority. The authority will be able to take any representations into account when considering whether to grant or refuse approval to the mast's siting and appearance.
There will continue to be a need for local authorities to establish the necessary avenues for consultation with local Members and residents ahead of a GPDO application. The guidance that we are drawing up will cover the local authority's role in bringing the application to the attention of interested parties, and undertaking any additional publicity that might be required to achieve that. We believe that the new procedures will overcome the problems described by the hon. Gentleman, and I hope that they will prevent any further sieges of Whinney lane or anywhere else.
Concern has been expressed about the number of telecommunications masts. It is important not to ignore the technical constraints of rolling out telecommunications networks; that said, we are anxious to keep the numbers of masts to a minimum, consistent with an efficient network. This is why we encourage mast sharing.
It is for that reason that the licences issued to telecommunications operators require them, before erecting a new mast, to take all reasonable steps to investigate using, or replacing for joint use, an existing mast or other structure, whether their own or belonging to another operator. I understand that 60 per cent. of the mobile operators' antennae are now on buildings, other structures or shared masts.
While recognising that mast or site sharing may not be the answer in every case—the installation of new and innovative masts and antennae, designed and sited to blend into the environment, might on occasion be a more attractive option—the Government attach great importance to minimising the impact of telecommunications development on the environment. We are keen to discuss with the telecommunications industry what more can be done on all sides to reduce the adverse environmental impact of new development, by furthering our policy on mast sharing and in other ways. To that end, my hon. Friend the Minister for the Regions, Regeneration and Planning will meet representatives of the industry early next month. I hope that, following all that I have said, the hon. Gentleman will realise that the Government take the matter very seriously, and are taking steps to address the problems that he has raised.
I understand the hon. Gentleman's worries about the alleged adverse health effects in connection with telecommunications installations. We are aware of public concern about the suggestion that there can be harmful effects from exposure to electromagnetic fields, including

those associated with mobile communications base stations, and the Government take that concern seriously. The National Radiological Protection Board issues guidelines for restricting human exposure to electromagnetic fields. The guidelines are based on well-established thermal effects, and their basis is broadly consistent with other international guidelines such as those of the International Commission on Non-Ionising Radiation Protection.
The NRPB guidelines can be exceeded in areas close to and directly in front of the antenna, but I should emphasise that that is within 1 to 2 m, and that the public are prevented from access to such areas. The practical effect of health and safety at work legislation, under which operators have a duty to ensure that their work activities do not present a risk to employees and the general public, will be to prevent public access to areas where the NRPB guideline levels are exceeded. Exposure at ground levels, and in areas to which the public have access, are many times below recommended exposure levels—typically, some thousands of times inside the exposure limit.
The House may be aware that on 8 December, my Department issued a joint circular with the Department of Health on a consultation exercise on land use planning and electromagnetic fields, which deals specifically with those considerations in the land use planning context. A copy of the consultation package has been placed in the Library. The closing date for responses is 19 February. Hon. Members, and members of the public with an interest in the subject, are encouraged to forward their views to my Department in the context of the public consultation.
I believe that the Government are acting appropriately to respond to the anxieties that have been expressed. I agree with the hon. Gentleman that the total absence of Conservative Members this evening suggests that concern is limited to the two parties that are represented, but I stress that the Government are concerned, and are taking steps to deal with the problems that have been identified. We shall continue to pursue the research in respect of health risks that the hon. Gentleman has anticipated. I hope that he will accept that the real concerns that he has voiced have been accepted by the Government.

Question put and agreed to.

Adjourned accordingly at five minutes to Eleven o'clock.